UK-Listed Online Gaming Companies Drop on Stock Market
Fears of a crackdown on online gambling in the United States knocked another 600 million pounds ($1.10 billion) off UK gaming stocks on Tuesday after the FBI moved to shut down the U.S. operations of BETonSPORTS.
The annual market size turnover of the gaming industry is estimated at nearly $100 million, with online gambling sites generating $12 billion in 2005. Some 8 million U.S. residents placed bets on the Web, making up about half the market.
By 2010 the worldwide revenue from inline gambling is expected to hit $24.5 billion, according to estimates from Christiansen Capital Advisors, an industry consulting group.
In the U.S., a 1961 law forbids interstate telephone betting which the Justice Department says also applies to the Internet but Americans bet via access to thousands of foreign Web site. Earlier this month, the House of Representatives passed a Bill to block most forms of Internet gambling.
Gambling sites have not been allowed to operate from the United Kingdom and most are based in offshore jurisdiction like Gibraltar, Cyprus, Antigua and Costa Rica. But that will change in mid-2007, when the independent Gambling Commission will start regulating British companies which run gaming sites.
The Big Three UK-Listed Firms: 1. PartyGaming, based on Gibraltar, gets 90 percent of its revenue from poker and recorded $978 million sales in 2005, most of it in the United Sates. 2. Sportingbet-Britain's second-bigegst online gaming group, it has a portfolio which includes the world's number four poker site, revenue was $2.7 billion for the year ending July 2005, 91 percent from sports betting. 3. 888 is over 90 percent controlled by two Israeli families and run by Gibraltar-based Cassava, which also operates fellow online casinos Pacific Poker and Reef Club Casino. In 2005, 55 percent of its $475 million revenues came from the U.S. 888 has a 65:35 split between casino and poker.