Shares of Online Gaming Companies Take a Slight Dip

 But Wall Street analysts say that the only significant legal issue facing popular online gaming sites, around the world, is whether to continue to offer online sports betting in the future to American customers.
 
The declines were across the board, but were not seen as huge losses by experts, nor are they expected to be long-lasting. PartyGaming declined by 8.5 pence, or 8.3 percent, to 94.5 pence at 11:53 a.m. in London trading today. Meantime, Sportingbet, the owner of Paradise Poker, dropped 36.25 pence, or 13 percent, to 245.75 pence, and BETandWIN.com Interactive Entertainment AG, a Vienna- based online sports-betting company, declined by 4.74 euros, or 8.7 percent, to 49.64 euros. During the same day, Leisure & Gaming Plc, the owner of the VIPsports betting brand, declined 11 pence, or 12 percent, to 81.5 pence. 888 lost 21 pence, or 11 percent, to 172 pence.

Triggering Event

The triggering event for the share decline was when the CEO of Betonsports, David Carruthers, was detained by federal authorities in Dallas as he changed planes on a trip from the U.K., according to a spokesman for his company.

 Gaming is a $12 billion a year business, and gamers based in the U.S. accounted for more than 80 percent of sales in PartyGaming's most recent fiscal year and about 55 percent at Web bookmaker Sportingbet Plc and online casino company 888 Holdings Plc.

 Analysts are not overly worried about the legal hassles, noting that only one person has ever been tried and convicted for online gaming in the U.S.,and that was in regard to a specific sports booking operation online.

``This appears to only apply to sports betting, said Christian Holland, a portfolio manager with London-based Cavendish Asset Management.
 
Only one person, Jay Cohen, has ever been tried and jailed in the U.S. for running an illegal Web gambling business, and he was charged in connection with sports betting. Cohen, then president of online bookmaker World Sports Exchange, was among 14 people charged in March 1998 and was convicted in February 2000. The others were not convicted.

 The U.S. government views online gambling as illegal under an old law prohibiting the use of telephone lines to place interstate bets. A House bill, written by Reps. Bob Goodlatte (R-Va.) and James Leach, (R-Iowa) specifically makes the statute applicable to Web gaming. The Senate has not yet approved the bill, and is unlikely to do so this year.

Essentially, the bill would bar credit-card companies from collecting payments for Internet casinos and require financial institutions to help law enforcement shut down money transfers to illegal gaming sites.

 The policy emerging in the U.S. contrasts sharply with the rest of the world. The U.K. is home to many publicly traded online poker sites and casinos,which are traded on the London Stock Exchange. In Sweden, the state owned Cosmopol recently entered the gaming market with its own online poker room Svenskaspel.com. Svenskaspel claims it has penetrated the market by as much as 25 percent since its recent launch.


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