888 and Bwin shares soar as US wagering competitors closed

18 April 2011

Shares in London-listed online wagering companies rose after some huge poker sites in the US were shut for alleged prohibited activity.

At the close of trading, Bwin were up 30% and 888 up 15% as financiers speculated that the US closures would boost their operations.

On Friday, 11 individuals connected to 3 major poker sites were charged with offenses, including scams.

The US probe includes three websites: Full Tilt, PokerStars, and Absolute Poker.

Federal US authorities implicated the 3 online poker sites of controling banks to process billion of dollars in prohibited income.

According to Execution Noble analyst Geetanjali Sharma: "The closure of the main rivals' operations and the US legal proceedings started against them ought to benefit European listed operators."

Playtech, another gaming site, also saw its shares jump 11%.

'Criminal fraud plan'

Prosecutors in New York City on Friday said they had issued restraining orders against more than 75 checking account in 14 nations utilized by the poker business.

US Attorney Preet Bharara said the sites "concocted a fancy criminal scams scheme, at the same time tricking some US banks and successfully bribing others to ensure the ongoing flow of billions in unlawful betting earnings".

The indictment stated the three betting websites did not abide by the US Unlawful Internet Gambling Enforcement Act, established in October 2006.

The law makes it unlawful for gambling businesses to accept most types of payment from individuals involved in unlawful web gaming.

The indictment looked for $3bn (₤ 1.8 bn) in cash laundering penalties and loss from the websites.

The authorities stated Absolute Poker had said quickly after the law was enacted that the US Congress had no control over the business's payment transactions.

PokerStars posted a declaration to its gamers on Saturday, stating it needed to suspend real money play for customers based in the US.

"Please be ensured gamer balances are safe. There is no cause for issue," the business stated.

"For all customers outside the US, it is company as usual."

A message published on the PokerStars.com website by the FBI said the agency had actually seized the domain name in connection with the investigation.

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