Empire Online Ltd. (AIM: EOL), controlled by CEO Noam Lanir, has terminated its US business, following the passage by Congress of a bill banning banks and credit cards from honoring payments to online gambling companies. Other online gambling companies have taken similar action.
Empire Online said 65% of its revenue came from the US. The company nevertheless announced that it would distribute a dividend of $0.017 per share.
Five days ago, online gambling companies Britain’s Leisure and Gaming plc (LSE:LNG) and FireOne Group plc (LSE:FPA) announced that they were suspending activity in the US, and would refocus their business on the European market. Sportingbet plc (AIM:SBT) also said it would quit the US market.
In early October, UK daily “The Guardian” reported that Empire Online planned to use $260 million in its cash reserves to invest in activity other than online gambling, in view of the pending Congressional legislation.
Lanir told analysts that he saw no future for online gambling in view of the changing legislation in the field.
Published by Globes [online], Israel business news - www.globes.co.il - on October 15, 2006
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