The UK gambling industry is set to experience massive growth during the coming World Cup, adding to the current national growth of 3% seen in gambling companies.

Despite the fact that many gambling companies’ stock performance as been relatively erratic lately, with gambling shares going up and down, investment and industry professionals are confident to identify booming online gambling companies as prime investment opportunities as margins have remained solid.

Last year several gambling companies increased their earnings share by over fifty per cent, and according to sources from well-known investment banking group Dresdner Kleinwort Wasserstein, more than twenty percent growth is projected for this financial year in the gambling sector.

Sceptics in the finance industry have little hope for the latest financial successes of online gambling; claiming that recent skyrocketing growth is merely a fad, however most believe the gambling industry will continue to grow. One finance manager is reported to have said that while online gambling currently accounts for barely five per cent of the worldwide gambling industry, he is confident that this will rise to around ten per cent in the near future.

A number of major funds in the UK have been investing heavily in the gambling industry, showing high levels of confidence in the sector, with funds such as the M&G UK Growth fund and the New Star’s UK Special Situations fund.

Manager of the New Star’s fund, James Ridgewell says that the current pall of threatened US anti-online gambling legislation is actually a boon in disguise, as investors have shied away from shares in internet gambling companies, creating excellent value options.

In addition to this, few new online gambling companies have entered the market due to the risk involved with impending possible legislation out of the US, allowing existing gambling sites to strengthen their client base.

Despite several online gambling companies sustaining severe losses in early trading when the US bill was approved, banning the use of electronic funds transfers, cheques and credit cards to pay for internet gambling, these losses were quickly recovered, and the industry remains confident that the bill will ultimately fail.

M&G UK Growth fund’s manager, Simon Murphy reportedly stated that with the England team such a strong favourite for this year’s Soccer World Cup, set to be hosted in Europe, UK gambling companies can expect to see a great rise in interest, with punters placing sporting bets on the matches, and investor interest following, as with all major sporting events.

However the current mood of optimistic confidence is not universally shared by all in the finance markets. Andy Brough, Schroder UK Mid 250 Fund’s manager does not hold any stocks in internet gambling companies, stating that the high operating margins are not sustainable for the long-term, not to mention the ease of entry, with a basic starting price of just £30,000 for a fully operational poker site.

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Tags: online gambling, online gambling legislation, uk gambling

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