Aussie online gaming shares plunge on US Internet restrictions

04 Oct 2006
00:00

Shares in Australian online gaming companies crashed more than 50 % in response to a US move to ban Internet betting, a Reuters report said.

The Reuters report said Melbourne-based Betcorp slumped 57%, on the Australian Stocks Exchange while Lasseters, based in Queensland, was down 51.4%.

The report said both companies earn most of their revenues in the US and are expected to be hit hard by the Unlawful Internet Gambling Enforcement Act, which was unexpectedly rushed through the US Congress.

The bill, expected to be signed into law this week, makes it illegal for finance companies to collect credit-card payments from customers using Internet gaming sites, the Reuters report said.

Betcorp, which two weeks ago insisted the US legislation's impact would be 'minimal', admitted its bottom line would be hurt, the Reuters report said.

'While management will take appropriate action to mitigate its impact, the act is likely to have a material adverse effect on the company and its profitability,' it said in a statement.

Lasseters, which generates 80% of its business in the US, did not comment on the US move.

In its annual report, issued last month, the company said it was closely monitoring US developments and would alter its business model to any changes in circumstance, the Reuters report said.

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