888 and Bwin shares soar as US betting rivals closed
18 April 2011
Shares in London-listed online wagering firms surged after some huge poker sites in the US were shut for alleged illegal activity.
At the close of trading, Bwin were up 30% and 888 up 15% as financiers speculated that the US closures would improve their operations.
On Friday, 11 individuals connected to three significant poker websites were charged with offences, including fraud.
The US probe involves three websites: Full Tilt, PokerStars, and Absolute Poker.
Federal US authorities implicated the three online poker sites of manipulating banks to process billion of dollars in prohibited earnings.
According to Execution Noble analyst Geetanjali Sharma: "The closure of the main rivals' operations and the US legal proceedings started against them need to benefit European listed operators."
Playtech, another gaming website, also saw its shares jump 11%.
'Criminal fraud scheme'
Prosecutors in New York City on Friday said they had released limiting orders versus more than 75 checking account in 14 countries used by the poker companies.
US Attorney Preet Bharara stated the websites "cooked up a fancy criminal fraud scheme, alternately deceiving some US banks and effectively bribing others to ensure the ongoing circulation of billions in unlawful gaming revenues".
The indictment stated the 3 gambling sites did not adhere to the US Unlawful Internet Gambling Enforcement Act, established in October 2006.
The law makes it illegal for gambling companies to accept most forms of payment from individuals involved in illegal web betting.
The indictment sought $3bn (₤ 1.8 bn) in cash laundering penalties and forfeiture from the sites.
The authorities stated Absolute Poker had actually said quickly after the law was enacted that the US Congress had no control over the business's payment transactions.
PokerStars published a statement to its gamers on Saturday, stating it needed to suspend genuine money play for clients based in the US.
"Please be assured player balances are safe. There is no cause for issue," the business stated.
"For all customers outside the US, it is organization as usual."
A message posted on the PokerStars.com website by the FBI said the agency had actually taken the domain in connection with the investigation.
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