Written By Kate Zimmermann | October 2, 2006 | Share This |

In a shrewd move of last minute politicking, Congress passed the Unlawful Internet Gambling Enforcement Act on the coattails of the Safe Port Act of 2006. Though still waiting on a signature from Bush, the conservative-backed bill is already settling into the law books. The Act will make it illegal for credit card companies to collect bet payments for US accounts, effectively putting the gambling companies out of business.

Stock markets responded on Monday by sending share prices of online gambling companies into a $7 billion plummet. PartyGaming, Sportingbet and 888 Holdings are three of the largest and hardest-hit gambling rackets. Bloomberg quotes shareholder Jamie Coleman,

““I can’t believe they actually managed to get it through…I’m pretty damn shocked, and I’m pretty damn shocked at the way they went about doing it as well.” “

Mr. Coleman, you clearly underestimate the sneakiness of the US government. Congressmen claim that this bill has been a “long time coming,” and that Internet gambling has technically been illegal since its inception. The Act merely “enforces” previous laws by holding banks and credit card companies responsible for enabling illegal transactions. Under the new law,

The anti-gambling legislation is awkwardly tacked to a republican port security bill designed in the interest of the “War on Terror.” It includes mandatory “terrorist watch-list checks of all port employees,” container scans for radiation, funding for “risk-based” security against terrorist attacks, funding for container-scanning technology development, and protocols for dealing with security incidents.
In the midst of a bi-cameral election, Democrats claim that the bill is a Republican ploy to generate voter support. The bill was co-sponsored, however, by a Democrat from Washington and a Republican from Maine.

In the meantime, with over half of their revenue coming from U.S. accounts, Internet gambling companies are scrambling to reorganize their business operations. CEO and founder of PartyGaming, Anurag Dikshit, lost 700 million pounds in today’s market slide. Once the 207th richest person in the world, I’d wager that poor Mr. Dikshit is having a pretty (ahem) shitty day.

Topics: ECommerce |