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News Archive
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Wall St bets on online gambling
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[2005-12-28]
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Many of the top financial firms are looking to invest in the up and coming business of online casinos.
A number of major blue-chip investors such as Merrill Lynch and Goldman Sachs now hold millions of dollars worth of shares in online gambling companies, reports the New York Times.
These two companies own one of the major online gambling sites, SportingBet. Goldman Sachs and Morgan Stanley also jointly hold positions in BetOnsports, a London-based publicly traded firm.
Although the federal law in the US considers online gambling to be illegal, experts are divided on whether companies should be held responsible for providing backing for offshore casinos.
Nevertheless, the majority of online gambling takes place within US shores and therefore the US government states that this sort of activity must be classed as illegal.
This difference in opinion seeks to highlight the fact that there is widespread disagreement on the legislation surrounding internet gambling and much of it is being largely ignored.
Figures show that there are literally millions of Americans using the internet to play a variety of games including poker, blackjack and roulette or to place bets on events.
On the part of the investors, they claim that the risks of investing in this fast-growing craze far outweigh the risks of owning shares in other volatile and unstable businesses.
"Our analysis shows the gain from these stocks outweighs the very small risk of owning them," a spokesman for one major investment house told the New York Times.
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