PartyGaming and rivals warn of U.S. gaming ban

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October 2, 2006

Online gaming group PartyGaming Plc (PRTY.L) and rivals Sportingbet (SBT.L) and 888 (888.L) warned on Monday they would be hit by legislation aimed at preventing gambling in the United States over the Internet.

U.S. Congress unexpectedly approved a bill early on Saturday that would make it illegal for banks and credit-card companies to make payments to online gambling sites.

The House of Representatives and Senate approved the measure and sent it to President George W. Bush to sign into law.

PartyGaming said in a statement: "If the President signs the act into law, the company will suspend all real money gaming business with U.S. residents, and such suspension will continue indefinitely.

"Any such suspension would also result in the group's financial performance falling significantly short of consensus forecasts for 2006 and 2007," it added.

PartyGaming's smaller rival Sportingbet (SBT.L) said the likely ban would hit trading, and said it had scrapped a planned merger with World Gaming (WGP.L) as a result of the passing of the legislation.

888 Plc (888.L) said the move would hit its results, but stressed it remained a profitable and viable business.

British online money transfer firm Neteller Plc (NLR.L) said the legislation would have a material adverse effect on its U.S.-facing business."

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