Friday, April 28, 2006

Market Report: Gambling stocks buoyed by US breakthrough

A bleak day for the London markets was given a lift by news that the American Gaming Association, the trade body of the US gambling industry, is to reclassify its position on online gambling.

The AGA, a powerful lobbying association, wants congress to look at regulation and taxation of the industry, a move in effect ending the prospect of legislation criminalising online gamblers.

The news was greeted enthusiastically by investors in London-listed gambling stocks, with PartyGaming and 888 Holdings, the two largest UK online gambling stocks, up strongly on good volume. Rumours over US prohibition of online gambling have consistently knocked the shares in the past few months, and sector bulls think that backing from AGA could give the industry a considerable long-term boost.

One trader said: "In the shorter term it is a relief rally but beyond that, if the US does decide to completely legitimise the industry, the possibilities for growth are outstanding."

PartyGaming ended as the best performer in the FTSE 100, after it gained 6.75p to 152.75p, a six-month high. 888 Holdings firmed 7p to 244p. The smaller online gambling stock BetonSports, which runs sports books on basketball, American football and baseball, also benefited, adding 9.25p to 169p.

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