A U.S. bill aimed at stamping out the $12 billion (6.9 billion pound) Internet gambling industry is doomed to fail, the chief executive of 888 Plc, one of the companies it is aimed at, said on Thursday.
A U.S. House committee on Wednesday approved a bill attempting to stop businesses such as 888 from accepting credit cards, hitting online gaming shares by up to 5 percent on Thursday after similar falls the day before.
But 888 Chief Executive John Anderson told Reuters: “We feel confident it won’t get through the next stages, and we`ll be okay.”
888 shares fell 3 percent to 174 pence by 9:36 a.m., even though the group announced a 16 percent increase in annual profits and a slight reduction in its U.S. exposure.
Profit before tax rose to $50.2 million in 2005 from $43.1 million in 2004, and the company said current trading was in line with expectations.
Shares in sector leader PartyGaming fell 5.4 percent, while the second-biggest online gaming group, Sportingbet, fell 3.9 percent.
The bill, cleared by voice vote in the House Financial Services Committee, would prohibit a gambling business from accepting credit cards, checks, wire transfers and electronic funds transfers in illegal gambling transactions.
Unlawful gambling, under the legislation, would include placing bets on online poker sites, and any other online wager made or received in a place where such a bet is illegal under federal or state law.
“This was well flagged, but these stocks will be quite tetchy this year,” said analyst Greg Feehely at Altium Securities. “The bill’s proponents appear to think this is their best chance in years.”
With about 8.5 million regular players in the U.S. and numerous routes for them to make payments, the bill would be difficult to enforce in the unlikely event it got through, he added.
888 said it diversified away from the United States in 2005, reducing the share of revenues it gets from the U.S. to 55 percent from 58 percent in 2004.
