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May
3rd

‘Black Friday’ Pushes Online Gaming Stocks Higher

The recent seizure of four major poker sites sent shock waves through the online gaming industry. The FBI seized four poker domains and froze several bank accounts around the world. 11 executives of the poker sites were indicted and a few arrests have been made. The US government is seeking $3 billion dollars in damages. The US alleges that the poker sites ‘tricked’ banks into processing gambling related transactions. Many credit the cooperation of an Australian payment processor who was facing 75 years in prison for the recent arrests. The executive was freed on bail and put in a witness protection program for his cooperation with US authorities.

Logically one would think that gaming stocks would take a dive after the recent seizures but this has not been the case for European gaming stocks. European players seeking a stable playing environment have flocked to many smaller European gaming outlets sending their stocks soaring on global exchanges. Shares for 888 Holdings rose 19% since the seizures on ‘black Friday’ and Bwin.Party shares were up 29.47%. Over the weekend following Black Friday European gaming operators huddled and came up with strategies and promotions designed to let players know they can still provide players with reliable services despite the actions of the US government. Many believe that European gaming operators will be the big winners in a chaotic online gaming industry.

Many online gaming operators left the US market shortly after the passage of anti online gaming legislation in the United States. Most UK based online bingo operators banned American players and continue to shut out American players to this day. Should online gambling be legalized in the US these operators would be well positioned to take advantage of the US gaming market. The fact that they did not violate US gambling laws will make it easier for them to acquire US gaming licenses in the future.

At the present time there is proposed legislation in the US congress that would tax, license and regulate online gaming in the US. The internet gambling industry is following developments closely. If the legislation passes European gaming stocks will rapidly rise in stock exchanges around the world. Fortunately there are still some internet bingo and poker sites still accepting American players. The fallout from Black Friday has not yet settled and for now it is anybody’s guess what the future holds for the online gaming industry.