Europe’s leading listed gambling companies reaped the benefit of Friday’s crackdown by US prosecutors on online poker, claiming that trust in those operators had been damaged beyond repair.
Shares in bwin.party climbed nearly a third, closing at 170p, a rise of 39p, while 888 Holdings rose 20 per cent, Playtech by more than 7 per cent and Sportingbet by nearly 5 per cent.
The rises were all on the back of what analyst Nick Batram of Peel Hunt called a “seismic online event” in the gambling industry.
US prosecutors are enlisting international counterparts to arrest most of the founders of PokerStars, Full Tilt and Absolute Poker, who have been charged with illegal gambling, money laundering and bank fraud. Their unregulated US websites were seized, although PokerStars and Full Tilt were continuing to operate in Europe, where they are subject to regulation. PokerStars has a licence from the Isle of Man and Full Tilt is registered in Alderney.
European operators, who fled the US market in 2006 when Congress banned online gambling transactions, have watched PokerStars and Full Tilt fill the void, taking bets from US customers then moving into the European market.
As poker players look for safer havens, some listed operators are aiming to exploit the situation by rolling out more television adverts and promoting their trustworthiness. One industry executive said: “We definitely feel our tough decision [to leave the US in 2006] is now vindicated.”
Mor Weizer, chief executive of Playtech, said its iPoker network had grown in player traffic since Friday. “There is no longer trust in unregulated operators. There are millions of non-US players now looking for trusted operators to place bets with.”
Analysts pointed to major shifts in poker activity over the weekend, with volumes moving from the troubled websites towards the listed operators and others still operating in the US.
Ivor Jones of Numis said the climate was in favour of the European listed operators. “We believe PokerStars and Full Tilt may not be able to continue to operate given the continuing actions of the US authorities. If this proves to be the case, there would clearly be a further step-change in the market,” he said.
James Hollins of Evolution said the action by the US Department of Justice did not necessarily mean the US would look to regulate online poker, something that operators such as bwin.party and 888 want.
“However, on balance, we think that ‘clearing the decks’ can stimulate regulation rather than prohibition,” said Mr Hollins.
Mr Batram said: “There are millions of US residents who play poker online and, whether PokerStars and Full Tilt are shut down or not, they will continue to find a way to continue playing. Therefore, providing a regulated and consistent environment for them to do so is a logical conclusion.”
In the US, which has an estimated 10m online poker players, hundreds complained not only about the prosecution but fretted in online discussions that they would lose savings tied up in PokerStars and Full Tilt Poker accounts.
Some said that they had deposited cash-out checks from the companies only to be told by their banks that the checks had not cleared and that the money would be debited from their holdings.
Others in the industry said that the seizure of the US websites would have major ramifications elsewhere, as advertising from the companies disappears and televised and online media coverage of poker tournaments could be drastically reduced.
Additional reporting by Joseph Menn in San Francisco
Get alerts on Playtech Ltd when a new story is published