Paddy Power Betfair Share News (PPB)

(Sharecast News) - UK gambling stocks that have expanded across the Atlantic took a hit on Tuesday after the US Department of Justice moved to tighten regulations on online gambling.The department's reversal of a 2011 ruling that the only form of online gambling classed as illegal was sports betting has resulted in William Hill, Paddy Power Betfair, GVC Holdings and 888 Holdings all dropping by between 1.5% and 7.6%.The department's assertion that the 2011 ruling was a misinterpretation of the 1961 Wire Act will likely be tested in courts and could affect the sale of online state lottery tickets states and casinos that offer online gambling.The move is a particular blow to UK outfits as several have already made deals to expand into the US market after a May ruling by the Supreme Court appeared to pave the way for legalised sports betting in a number of states, potentially even nationwide.William Hill signed a 25-year sports betting deal with Eldorado Resorts in September for example, while GVC Holdings partnered with MGM Resorts to set up a US-based online betting platform.UK gambling companies have found foreign expansion increasingly enticing after facing increased regulation at home, with the recent cap on stakes on fixed odds betting terminals in the UK expected to cut annual revenue by as much as £1.8bn.The Department of Justice had been lobbied to reconsider the 2011 ruling by billionaire casino executive Sheldon Adelson, a close friend of President Donald Trump.