One of the pioneering turnkey providers in the online gambling industry,
World Gaming plc has asked for its shares on the London market to
be suspended following an almost 90 percent decline in the value of
its stock as a result of investor panic over the new US financial
restrictions.
Like other offshore gambling firms, World Gaming relies heavily on
revenue from US customers, which in World Gaming's case is believed
to represent 95 percent of its business via the sites sportingbet.com,
sportsbetting.com and betonusa.com.
In a statement, the company said there was “a fundamental
uncertainty" over its ability to continue trading.
The statement announced: “Following the announcement released
by the company on Tuesday 3 October relating to developments in United
States online gambling legislation, the Directors of World Gaming
announce that, following discussions with all of key parties concerned
and having taken legal advice, they have requested the trading of
the Company's shares be suspended with immediate effect due to a fundamental
uncertainty over its ability to continue trading.”
Earlier this month, World Gaming said it "may be in technical
default of its loan conditions due to a material adverse change in
the circumstances of the business, arising from proposed changes in
legislation in the United States". The company warned
last week that it could be in "technical default of its
loan conditions", after seeing its debt level soar to
$23 million (GBP12.7 million).
A merger with larger Internet gambling group Sportingbet was also
scrapped after the approval of the new laws, which ban banks and credit
card companies from processing internet bet payments.
The company said it would make further announcements in due course.