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
“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
“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.