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Online casinos become a riskier financial bet

How much more of a gamble has it become to own a piece of the top online casinos? Is investing in online casinos a sucker’s bet, or the chance to buy low and score a big payday?
The questions have intensified since a top online casinos firm, an online sports betting company traded on the London Stock Exchange, stopped taking bets from the United States after the Justice Department charged the online casinos company and current and former executives with operating an illegal online casinos gambling operation.
Online casinos Investors and online casinos industry analysts, who have long said that owning shares in online casinos casinos involves serious risk, nonetheless expressed surprise at the move by prosecutors. They say the development, coupled with legislation in Washington that could clamp down further on the industry, has created new cause for concern.
And yet investors keep coming.
The indictment of the top online casinos firm prompted a big sell-off in the shares of publicly traded online casinos, but the sector has rebounded. Some industry analysts even call this a buying opportunity.
Greg Harris, an online casinos analyst for Canaccord Adams, a British investment bank, said many investors seemed undaunted by what they viewed as American bluster that could not stop the industry.
“You can throw a lot of things to scare them, but there are still guys finding value,” Mr. Harris said of investors bullish on online casinos. He said he also believed that panicked overselling had made some online casinos stocks cheap now.
That sentiment is not universal. The controversy swirling around the online casinos firm has raised questions about whether other online gambling companies might soon be in the Justice Department’s sights, net gambling industry executives and analysts said.
“None of us know whether this indictment is specific to (the firm) or a sweeping attack against online gaming per se,” said an executive from a publicly traded online gambling firm who requested anonymity because company lawyers had told him not to comment to the press. “We’re keeping our heads down.”
There are indications that some major investors, including American investment houses, are beginning to distance themselves from the online gambling companies, either by dumping shares or by ceasing to provide analyst coverage.
But other investors, notably hedge funds, have led a comeback. Shares of a top net gambling firm hit 398.5 pence ($7.50) on July 4. On July 18, after the indictment, they tumbled, in heavy volume, reaching a low of 171 pence on July 21. The stock has recovered a bit and is now at 249.25 pence. Shares of another top firm also slid in mid-July on heavy volume, hitting a low of 85.25 pence on July 18. But they have revived strongly, hitting a high of 120 pence on Aug. 4. The shares are now at 111 pence.
Another online gambling firm, was at 597.50 pence on July 4, fell to 319 on July 20, and is now at 400 pence.

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