UK quoted shares like Neteller, PartyGaming and SportingBet all took a sharp tumble in late trading yesterday after political manoeuvring in the US brought closer the possibility of new laws to prevent on-line gaming companies from accepting credit cards and similar methods of receiving funds from gamblers in the US.
Although still a long way from becoming written in law, a Republican Bill has been cleared for debate in the House of Representatives. The Bill would prevent a gambling organisation from accepting various methods of financing from players, including credit cards, wire transfers, and so on, effectively cutting off the vital supply of funds from punters. In short, there would be no ambiguity about whether on-line betting would be illegal in many States - it would be illegal regardless of the offshore status of the gaming companies.
There would apparently be one or two exceptions to the law, such as horse-racing, thus weakening the moral stance somewhat. Commentators have suggested the power of the horse-racing lobby overcomes the moral issues!
Many commentators also suggest this law will never make it to the "Statute Book" simply because it is the wrong approach to concerns surrounding an industry that is now an immense economic phenomenon, not to mention the prickly question of civil liberties and the right of adults to decide what is right for them to do and not do. In contrast, the UK is taking a far more sensible approach by attempting to pass laws to regulate and embrace a growing industry. After all, if the UK can attract the gaming companies to its shores, the taxes to be raised are attractive and the country benefits from the economic growth in revenues. Regulation would then attempt to address the genuine concerns of addiction, under-age gambling and associated side-effects.
As usual, it is a case of watching this space. Investors in gaming shares, meanwhile, must accept that they are in for a rocky ride!
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