UK/US - Pension schemes in the UK, many with high exposure to gambling stocks, were among those burnt by the legislation passed recently by US Congress banning internet gambling.
John Greene, CIO of Investment Solutions, told Global Pensions approximately £7bn was wiped off the value of online gaming companies on Monday after the signing of the bill, a "significant portion" of which being UK pension fund assets.
The bill passed by Congress and sent to president George W Bush to sign into law, makes it illegal for banks and credit card companies to make payments to online gambling sites, effectively closing the industry in the US.
Greene called on the UK government to review the US bill and refer the case to the World Trade Organization (WTO).
"As UK investors including pensioners count the cost of such legislation it does seem appropriate that the UK government or the EU should review the US bill in the light of current protectionist rules and refer the case to the WTO," he said.
PartyGaming, operator of PartyPoker.com, Sportingbet and 888 Plc have all stated they are likely to pull out of the US on the back of the ban. Shares in the firms plummeted early this week, with numerous institutional investors feeling the pinch.
Mitch Garber, chief executive officer of PartyGaming, said: "This development is a significant setback for our company, our shareholders, our players and our industry. The board respects the laws of the US government, and will continue to analyse their applicability, but also continues to believe that a regulatory framework for online gaming, including poker and casino gaming is the solution."
The ban, which was a result of the Unlawful Internet Gambling Enforcement Act of 2006, was attached to HR 4954, the Safe Port Act.
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