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| 'US probe' knocks gaming shares |
| Shares in online gaming firms have tumbled again - amid reports the US Department of Justice is stepping up its probe into the industry.
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| UNITED STATES OF AMERICA
, 22-January-2007
10:0:16 AM |
| It has demanded that investment banks hand over documents and details of phone calls connected with internet gaming firms, reports say.
Partygaming shares were 8.3% lower in Monday afternoon trading while Sportingbet lost about 3.5%.
Online gambling was effectively banned in the US last year.
Legislation was introduced that outlawed financial transactions related to gaming sites - and was signed into law by President George W Bush in October.
Falling values
Reports on Sunday said that the Department of Justice (DoJ) had ordered 16 banks, including HSBC, Dresdner Kleinwort and Deutsche Bank, as well as accountants and law firms to pass on information.
Analysts say that the DoJ move is part of its attempts to build cases against those who have profited from online gaming in the US.
In July last year, executives from online gaming firms, including Sportingbet and Betonsports were detained by US authorities.
Last week, two founders of internet payment firm Neteller, which has been used by gaming sites, were charged with handling billions of dollars in illegal gambling proceeds. The company has now stopped handling gambling transactions from US.
Millions were wiped off the value of internet gaming firms last year as they ceased trading in the US - the world's most valuable gambling market.
Before the US crackdown , Partygaming had generated about 75% of its income from the US while about half of 888 Holding's business came from the country.
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