Powerful Congressman Wants Two Year Amnesty on Internet Gambling LawPartyGaming Shares finish strong amidst reports
Geoff Foster, Daily Mail
22 February 2007
The online gaming massacre of 2006 saw £6.5bn wiped off the sector's value. The US clampdown on internet gambling sparked an avalanche of selling which left thousands of investors, big and small, nursing hefty losses.
They have since given the industry the bargepole treatment, preferring safer havens. Until yesterday, that is.
Various rumours prompted a flurry of speculative buying in PartyGaming which lifted the shares to 45¼p before closing 4¼p higher at 41½p.
Brave buyers piled in amid reports that veteran Congressman Barney Frank, Democrat chairman of the House Financial Services Committee, wants to repeal the gambling ruling and has called for a two-year amnesty. Last March, Frank said: 'Adults are entitled to do with their money what they want to do.'
Other stimulants included very vague takeover talk and gossip that full-year figures on March 1 will easily exceed expectations.
It was the September arrest in the US of Sportingbet's former chairman Peter Dicks that preceded the sector's collapse and led to £1bn being slashed from its value. The group had to flog its US gaming division for a token dollar.
The merest hint of a US reprieve saw a welcome recovery which left the stock 5p better at 40p on hefty turnover of 13.8m, well up on Tuesday's mediocre 983,000. 888 Holdings, still waiting for Ladbrokes to pounce, firmed 1½p to 111½p.
All bets were off at Ladbrokes as the betting shops group succumbed to nervous selling ahead of today's results to finish 11¼p cheaper at 441½p.
A trading statement in November highlighted the weakness in second-half trading where gross win was barely growing and operating profits declined by around 6pc between July and October.
The Footsie extended earlier losses to finish 55.2 points off at 6,357.1, making a two-day loss of 87.1 points. Fund managers trousered profits on seeing Wall Street drop 79.4 points in the early stages after January's higher than expected gains in consumer prices fuelled concerns that inflation pressures will prevent the Fed from reducing US interest rates later this year.
