By Bloomberg News  |  March 15, 2007

WASHINGTON -- Representative Barney Frank may introduce legislation that would repeal a ban on Internet gambling, sending shares of online-gaming stocks higher.

Heather Wong, a spokeswoman for Frank, said the legislator is in the "thinking stage" of drafting a bill to reverse Congress's decision last year to prohibit the collection of credit card payments from gambling websites. She said she had no other details.

The Financial Times quoted the Massachusetts Democrat yesterday saying that the law, formally known as the Unlawful Enforcement Gambling Act, is "preposterous" and one of the "stupidest" ever passed.

Shares of Gibraltar-based PartyGaming Plc, the world's biggest Internet poker operator, rose the most since 2005. 888 Holdings Plc and SportingBet Plc also advanced in London. The Financial Times reported Frank's decision earlier yesterday .

"The slightest indicator that operators may get business back in the US is going to get speculators coming in," said Andrew French, a sales trader at E*Trade Securities in London.

Online-gaming stocks plummeted across Europe in October after Congress unexpectedly passed the ban. PartyGaming lost about three-quarters of its revenue as a result of ending US operations, while 888 lost about half its revenue.

PartyGaming rose 13 percent, the most since Dec. 8, 2005. Sportingbet, the owner of Paradise Poker, gained 5.4 percent. 888 added 3.9 percent.

To crimp the flow of funds to betting sites, Congress passed the bill Sept. 30, barring credit card companies from processing payments for the industry. President Bush signed the measure into law on Oct. 13.

The legislation sought to close the business to people in the US, representing half of the world's Internet gambling market. Its backers argued that a past ban on online gaming in the US merely pushed the business offshore.