Priests Are Shocked By Unholy Share Bet

A trust for infirm clergy and an Oxford college are among the institutions that have profited from Party Gaming's soaring share price.

St Hilda's College and the Secular Clergy Common Fund have banked returns of up to 50% by backing the controversial company.

Both institutions were listed as holders of shares in the group shortly after it floated — but five weeks later they appear to have sold out.

Although the investment has proved very profitable, it may anger religious groups and student leaders who raised concerns about the company's flotation.

The Secular Clergy Common Fund, a charity for ill and infirm Roman Catholic priests, bought shares in the internet poker group despite an ethical investment policy banning it from buying shares in gambling companies.

HSBC, which manages the charity's investments, bought 22,403 shares on behalf of the the fund.

This weekend, Michael O'Shea, who runs the charity, described the investment as an "error of judgment". He added: "As a Catholic charity, we can't be seen to be involved (with Party Gaming). It's not ethical is it, really? It was only for such a short time. We pulled out very quickly."

O'Shea declined to comment on how the charity had come to invest in the stock or how much profit it had made.

HSBC also manages investments for the women-only St Hilda's College, which bought 24,796 shares in Party Gaming when the company floated.

A spokesman for the college's vice-principal, Janet Howarth, said that the selection of shares was left entirely to asset managers who acted on behalf of the institution.

"The college has a socially responsible investment policy, which was agreed by the fellows of the college after discussion with student representatives," she said.

However, HSBC insisted that the group would never "invest in a company outside the parameters agreed with our clients."

Until now, Party Gaming's institutional shareholders have remained in the shadows because stock-market rules only require shareholders to declare stakes in companies when they exceed 3%.

However, The Sunday Times has obtained a copy of Party Gaming's shareholder register, although many remain hidden behind nominee accounts.

Party Gaming was attacked by both the Salvation Army and the National Union of Students (NUS) ahead of its float.

The NUS branded online gambling "a very dangerous way to supplement income which could result in great financial loss."

Meanwhile, the race to win the next national lottery licence moved a step forward this weekend when the industry regulator outlined plans for a new bidding process.

Responding to submissions from companies including supermarket group Tesco, Gala, the gaming firm, and international lottery operators, the National Lottery Commission said it could consider paying bidders' costs in an attempt to drive competition for the licence, which begins in 2009 and is expected to last for 15 years.

Sir Richard Branson, who had vowed never to bid for the lottery licence again after controversially losing out five years ago, is understood to be keeping a close eye on regulatory developments and is said by one person close to him to be "more likely than not" to bid again. Branson, however, would distance any bid from his Virgin Group, and would again pledge to run the lottery as a not-for-profit venture.