TD Waterhouse said that shares in Online Gambling firms remained amongst the top trades this week, even after an increase in tax rates for operators.
In fact, online gaming operator Partygaming was at the top of broker TD Waterhouse’s ten best buys. This is the second consecutive week Partygaming has occupied the top spot. TD Waterhouse CEO Angus Rigby indicated that the higher than expected tax rate for gaming operators as announced by Chancellor Gordon Brown had done little to curtail investor interest in the area.
Sam Hart is an analyst at stockbroker Charles Stanley. ‘We don’t trade in (online gaming) stock, however I can see why it appears on this list. It is very much a day-trader stock, it’s notoriously volatile.’ Hart said.
The biggest online gaming operators were forced out of the US market this year due to legislation that effectively made it impossible for them to collect money from their US based client base. Publicly traded companies (PLCs) including Partygaming counted heavily on the US market at the time and this resulted in a significant share price fall for PLCs and the sector overall. Many PLCs turned then to the UK and European markets. These are heavily regulated and not as restrictive as the US.
Recently, Democrat Congressman Barney Frank announced that he is seeking to repeal the very piece of internet gambling legislation that caused the PLC exodus from the US market. If this were to transpire, there could indeed be a renaissance in store for the once mighty PLCs.
