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Speculative reporting gives false hope to investors
UK gaming stocks recovered ground as the London market opened midweek on rumours that a deal had been struck between Bet On Sports and the U.S. Department of Justice, only to fall back when this was denied by the company.
The rumours, allegedly started by a speculative article in an industry publication, initially enabled investors to recover some of the losses suffered in the last two sessions, on talk that BoS had reached a deal with U.S. authorities to resume business by the end of this week.
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Worries of a crackdown on online gambling in the U.S. knocked gaming stocks on Monday and Tuesday when federal authorities sought court interdicts to shut down the U.S. operations of BETonSPORTS after detaining CEO David Carruthers on a grand jury indictment that named 10 other people and contained 22 charges.
One UK trader cited a report on The Online Wire.com, which apparently said BETonSPORTS had reached a deal with the U.S. Department of Justice on Tuesday night.
However, a spokesman for the company denied that this was the case, dashing the hopes of some investors and turning share prices weak again after brief rallies in the 10 to 15 percent range.
"Neither the company nor lawyers acting on its behalf have reached any such agreement nor are they in negotiations with any other party to these proceedings," BETonSPORTS said in a statement.
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