Shares in online betting companies fall over legal fears
Shares in Europe's online betting companies fell yesterday as a fresh set of legal worries from Germany about private gaming groups caused another bout of panic among investors. Bwin, the Austrian online gaming group formerly known as BetandWin, lost nearly a third of its market value as a German media report said the state of Saxony would try to strip it of its German gaming licence. Saxony would only say it would announce measures against Bwin but officials said it would probably prohibit the company before withdrawing its licence. The move comes amid growing global uncertainty about the legal status of online gaming companies. The arrest in the US last month of David Carruthers, formerly chief executive of UK-listed BetonSports, has led to fears of a crackdown on internet betting there and caused fluctuations in share prices. State and national governments in Europe have threatened bans on gaming operators, but the European Commission is taking legal action against seven countries for allegedly restricting sports betting companies from entering the market. In Germany, 16 regional states want to ban private operators on the high street and online. But Bwin has succeeded in taking market share from Oddset, the monopoly gaming operator. Most analysts said Bwin's share fall to €22.99 reflected uncertainty ahead of second-quarter results likely to show a slump in profitability and higher costs during the World Cup. Its shares are down 78% from their year high. Bwin said if the withdrawal of its licence was confirmed it would sue for up to € 500 million (£337m) but underlined it had already faced several legal challenges and won them. (Financial Times)
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