Shares in online gambling companies like Partygaming are in freefall this morning after the US Congress unexpectedly passed anti-online gambling laws late on Friday.
The bill makes it illegal for credit card companies to process payments to gambling firms. PartyGaming saw 60 per cent of its value disappear in early trading this morning.
The Safe Port Act is expected to be signed into law by George W Bush in the next two weeks. PartyGaming said in a statement to the Stock Exchange that if the bill is signed it will have to stop taking all cash bets from US punters. More than half of the company's revenue comes from US residents.
888Holdings is suffering a similar meltdown on the markets. Its share price has also fallen more than 45 per cent. In a statement to the Stock Exchange the company said that although the precise impact of the legislation was not clear it was obvious Congress is intent on marking all forms of internet gambling as illegal.
888 said in the six months ended 30 June 2006 52 per cent of its revenues came from US customers.
Sportingbet is also down almost 60 per cent.
The Safe Port Act is primarily aimed at providing some $3.4bn spending in making ports safe in The War Against Terror. Much of the money will be spent inspecting containers - described by one Congresswoman as having "the potential to be the Trojan Horse of the 21st Century."®