Cryptologic stock falls on fears of U.S. gaming bill
10/5/01 10:07 AM
Source: Reuters
TORONTO, Oct 5 (Reuters) - Shares in Toronto-based CryptoLogic Inc., a maker of software for Internet casinos, tumbled on Friday on fears the United States might introduce strict online gambling rules that would effectively cripple the industry.
Cryptologic was trading at a six-month low of C$17.85, down C$3.15, or 15 percent, on the Toronto Stock Exchange early on Friday afternoon. It was the second straight day of poor trading for the company, which fell C$3 on Thursday
Analysts pointed to an attachment to the recently proposed U.S. anti-terrorism bill that could put further pressure on online gaming, an industry already on shaky legal ground.
While online gaming is illegal in Canada, Canadians can use gambling sites whose servers are located out of the country.
The rider, if passed, would ban all forms of online gaming in the United States, and also prohibit U.S. financial institutions, which process the online payments, from dealing with the sites.
Analysts said that while the bill may pass, it was uncertain whether the rider that deals with the online gaming would remain.
"Because it's part of the financial anti-terrorism bill which has strong support, we don't know how fast it will go through the various subcommittees it has to go through," said Rob Klein of Thomson Kernaghan & Co. in Toronto.
"It has always been full of legal uncertainty," he added.
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