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KAI RYSSDAL: If you were placing bets on online gambling today, you probably should have just quietly folded and gone away. Shares in online gambling firms crashed nearly 60 percent on the London Stock Exchange. Before Congress broke for its fall recess, lawmakers effectively banned Internet betting in this country. Most of the big online gaming companies are listed over in the UK but they do make almost half of their $12 billion every year from American bettors. From London, Marketplace's Stephen Beard reports.

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STEPHEN BEARD: This business was always going to be risky.

Most of the online betting firms are based outside the U.S. because the legal status of gambling there is so murky.

The bosses of two large firms were arrested while visiting America recently.

Now Congress has made the situation brutally clear. They've made it illegal for banks or credit card companies to process online bets.

If the bill becomes law, it'll be game over for Internet betting- says analyst John Heaton.

JOHN HEATON: It's been proved in the past that prohibition doesn't work but I think in the short term, this cutting off of the funds is going to be a very effective measure stopping people betting from the States into European and Caribbean betting operations.

This is a disaster for most of the online gambling firms.

PartyGaming, the biggest, gets 78% of its revenue from American bettors, and the U.S. won't benefit from the ban either - claims Ken Whitener of EOG.com, prohibition isn't going to stop Americans from making wagers.

KEN WHITENER: I think it's going to cause a lot of gamblers to go back to the archaic method meeting "Dino" or " Benny the Bullet" on the street corner and doing business with illegal bookmakers.

But for now the biggest losers are British investors who piled into online betting company stock. They were banking on big profits from the U.S.

It looks like that gamble has not paid off.

In London, this is Stephen Beard for Marketplace.