Shockwaves have been sent through the online gaming industry after the unexpected approval of anti-gambling legislation late on Friday in the US.
The laws – the first in the States to deal specifically with internet gaming – ban banks and credit card companies from processing payments for bets placed over the web.
They were approved by Congress after being attached to an unrelated bill on security in US ports – a move which took many in the industry by surprise.
Debate over the issue had focused on a separate, stand-alone gambling bill which lawmakers have yet to approve.
Gaming firms – several of which rely on the US for the majority of their takings – held emergency meetings over the weekend to discuss the move’s impact.
888 Holdings – which earned 52% of its revenues from the States in the first half of this year – said it expected the laws to become effective within the next fortnight, after they are signed by president George Bush.
Although saying the precise effect of the legislation was still unclear, it said it was suspending bets from customers in the US.
It added it would “review its fixed cost base in light of the suspension”, and that this could result in charges being taken in its annual results.
Sportingbet, which also relies heavily on US-based customers, said it would take advice in the next few days before “taking any specific actions as a result of the Act.”
“Should Sportingbet’s non-US international banking partners determine that the act applied to them, then Sportingbet would no longer be able to take deposits from US residents and this would have a material impact on the company’s trading performance,” it said in a statement.
At the time of writing, Sportingbet’s shares had fallen 62% on the news, while World Gaming’s were 73% down.
In a joint statement, the two companies said they had “discontinued any discussions” regarding the takeover.
Meanwhile, PartyGaming, which generates almost 80% of its revenues from the US, said the bill would cause its financial performance to fall “significantly short of consensus forecasts” for 2006 and 2007.
The firm, whose shares were 58% down, added: “If the President signs the act into law, the company will suspend all real money gaming business with US residents, and such suspension will continue indefinitely.”
Aside from gaming companies, hundreds of thousands of consumers will no doubt be up in arms at the move.
The US-based Poker Players Alliance said: “This last-minute deal reeks of political gamesmanship. The American people should be outraged that Congress has hijacked a vital security bill with a poker prohibition that nearly three-fourths of the country opposes.“