Gaming collapse sparks debt worry at World Gaming
The misery for internet gambling firm World Gaming continued today after it admitted it was struggling to deal with its $23m (€18m) debts.
Shares in the London-based company tumbled by around a third when it told the stock market that “it may be in technical default of its loan conditions” because of new anti-gaming laws in the United States.
It followed a bloodbath in the online gaming sector yesterday in which World Gaming lost 76% of its value in the wake of Congress passing the controversial Unlawful Internet Gambling Enforcement Act.
World Gaming was today worth just £10m (€14.8m) compared with £62.8m (€93.2m) before yesterday’s crash and £211.8m (€314.3m) in August last year.
It was the hardest hit of the online gaming stocks by the new legislation, which bans banks and credit card companies in the US from processing payments to online casinos.
The law effectively deprives World Gaming of its revenue stream as more than 95% of its business is done in the US through its websites such as sportingbetusa.com, sportsbetting.com and betonusa.com.
The company was $23m (€18m) in debt at the end of June.
Today it said: “The company continues to operate at the current time and is in discussion with its lenders.”
