No More Online Gamblingposted by MR WAVETHEORY at 10/01/2006 07:11:00 AM
Both houses of Congress have now passed the online gambling bill. The onling gambling bill bans online poker sites from serving US customers. It will very likely be signed by the President. That means bad news for Cryptologic, Inc (Nasdaq CRYP), PartyGaming Plc. (LSE PRTY), and SportingBet (LSE SBT). Senator Bill Frist attached the bill at the 11th hour to the Port Security Bill which was a guaranteed winner - votes for and against the bill was 409-2. Frist is seeking the Republican nomination for President in 2008.
I went through the bill which is part of the Safe Port Act and Title VIII of the Act talks about "Unlawful Internet Gambling Enforcement." I think the most important part of the bill deals with prohibition of payment processing for online gambling. Specifically, the bill states:
"No person engaged in the business of betting or wagering may knowingly accept, in connection with the participation of another person in connection in unlawful internet gambling (1) credit, or the proceeds of credit, extended to or on behalf of such other person (including credit extended through the use of a credit card)"Bloomberg says the bill shuts down the payment system for online gambling. It bans credit card payment companies from serving online casinos. And get this ...
"If someone goes out and runs up a big credit card debt on one of these online casinos, they can't come back and say you have to pay us now,'' said Senator Jon Kyl an Arizona Republican and co-sponsor of the measure with Leach. "The bank says, "We can't pay you." In fact it's illegal for the bank to pay.''So, if you are playing online poker, starting making big bets, because the casinos won't be able to collect - lawfully. The big question on investors minds will be: Where will these stocks open?