dixieflatline
09-07-2006, 01:40 PM
Stay out of the US.
Sept. 7 (Bloomberg) -- Sportingbet Plc said Chairman Peter Dicks was detained in the U.S., the second manager of a British company to be held amid a clampdown on online gambling.
Dicks, 64, was detained at 2 a.m. London time today and will face a hearing at 2 p.m., Sportingbet said in a statement. A spokesman for the company declined to elaborate on the reasons for the arrest and wouldn't comment.
Sportingbet stock slid 44 percent in two days in July after David Carruthers, then the chief executive officer of U.K. Web bookmaker Betonsports Plc, was arrested and charged with crimes including racketeering and fraud. A U.S. court ordered Betonsports to stop accepting wagers from the country, its main market, and return deposits to American gamblers.
``Unless the chairman is being held on charges unrelated to online gaming, we can probably assume the Department of Justice has an agenda against sports-betting companies that are using telephone lines to make bets,'' said Andrew Lee, an online gaming analyst at Dresdner Kleinwort in London.
Calls to the media lines for the U.S. Justice Department and U.S. Immigration and Customs weren't immediately answered before business hours today.
U.S. Clients
London-based Sportingbet, which first sold shares to investors in January 2001, accepted almost 150 million sports and gaming wagers in the fiscal third quarter that ended April 30. About four-fifths of clients are American. Betonsports said last month it would shut down units that take bets from the U.S.
The number of American customers who used Sportingbet's Web sites to bet on athletics rose 51 percent from a year earlier to almost 165,000 in the quarter. Sports wagers numbered 8.2 million and averaged $51 in size.
Sportingbet, which has a market value of 1 billion pounds ($1.9 billion), made the announcement today in a statement after asking for its shares to be suspended. Shares of PartyGaming Plc, the world's biggest Internet poker company, dropped as much as 19 percent in London.
Online gambling has become a $12 billion-a-year industry for companies including Gibraltar-based PartyGaming, which got more than four-fifths of its sales from the U.S. last year. Carruthers was indicted about a week after American legislators approved a measure to stifle online gambling by restricting the flow of money to illegal gaming Web sites.
Rivals' Shares Slide
PartyGaming stock fell as much as 22.5 pence to 94.75 pence in London today and was down 6.6 percent to 109.5 pence at 1:19 p.m. local time. Bwin Interactive Entertainment AG, an Austrian online bookmaker, slid 3.28 euros, or 12 percent, to 23.84 euros in Vienna, rebounding from a drop of as much as 19 percent.
Leisure & Gaming Plc, which owns betting brands including VIPsports, dropped 22.5 pence, or 31 percent, to 51 pence in London. 888 Holdings Plc, the largest online casino operator, slid 24 pence, or 14 percent, to 147 pence.
The U.S. government views Internet gambling as illegal under a 1961 law that bars the use of telephone lines to make interstate wagers. Sports betting triggered the only case in which someone has been tried and jailed in the U.S. for running an illegal Web gambling business, Greg Harris, an analyst at Canaccord Adams in London, said when Carruthers was charged.
NFL Season
Dicks, whose detention was announced on the same day that the U.S. National Football League starts its season, was visiting the U.S. for reasons unrelated to Sportingbet, the company said in the statement. Betonsports' Carruthers was detained in Dallas while changing planes on a trip.
Investors had believed Betonsports was ``totally different to what Sportingbet does,'' Dresdner Kleinwort's Lee said.
Along with Carruthers, the Betonsports indictment named people including company founder Gary Kaplan, who allegedly has not paid federal wagering excise taxes on more than $3.3 billion in bets taken from the U.S. The indictment seeks the forfeiture of $4.5 billion from Kaplan and other co-defendants.
Dicks became non-executive chairman of Sportingbet.com Plc, as the company was known, in January 2000 and also is chairman of Daniel Stewart Securities Plc.
Jay Cohen, the former president of online bookmaker World Sports Exchange, is the only person to be jailed for running an illegal Internet gambling business in the U.S. He was among 14 people charged in March 1998 and was convicted in February 2000. Cohen unsuccessfully appealed his 21-month sentence all the way to the Supreme Court.
Sept. 7 (Bloomberg) -- Sportingbet Plc said Chairman Peter Dicks was detained in the U.S., the second manager of a British company to be held amid a clampdown on online gambling.
Dicks, 64, was detained at 2 a.m. London time today and will face a hearing at 2 p.m., Sportingbet said in a statement. A spokesman for the company declined to elaborate on the reasons for the arrest and wouldn't comment.
Sportingbet stock slid 44 percent in two days in July after David Carruthers, then the chief executive officer of U.K. Web bookmaker Betonsports Plc, was arrested and charged with crimes including racketeering and fraud. A U.S. court ordered Betonsports to stop accepting wagers from the country, its main market, and return deposits to American gamblers.
``Unless the chairman is being held on charges unrelated to online gaming, we can probably assume the Department of Justice has an agenda against sports-betting companies that are using telephone lines to make bets,'' said Andrew Lee, an online gaming analyst at Dresdner Kleinwort in London.
Calls to the media lines for the U.S. Justice Department and U.S. Immigration and Customs weren't immediately answered before business hours today.
U.S. Clients
London-based Sportingbet, which first sold shares to investors in January 2001, accepted almost 150 million sports and gaming wagers in the fiscal third quarter that ended April 30. About four-fifths of clients are American. Betonsports said last month it would shut down units that take bets from the U.S.
The number of American customers who used Sportingbet's Web sites to bet on athletics rose 51 percent from a year earlier to almost 165,000 in the quarter. Sports wagers numbered 8.2 million and averaged $51 in size.
Sportingbet, which has a market value of 1 billion pounds ($1.9 billion), made the announcement today in a statement after asking for its shares to be suspended. Shares of PartyGaming Plc, the world's biggest Internet poker company, dropped as much as 19 percent in London.
Online gambling has become a $12 billion-a-year industry for companies including Gibraltar-based PartyGaming, which got more than four-fifths of its sales from the U.S. last year. Carruthers was indicted about a week after American legislators approved a measure to stifle online gambling by restricting the flow of money to illegal gaming Web sites.
Rivals' Shares Slide
PartyGaming stock fell as much as 22.5 pence to 94.75 pence in London today and was down 6.6 percent to 109.5 pence at 1:19 p.m. local time. Bwin Interactive Entertainment AG, an Austrian online bookmaker, slid 3.28 euros, or 12 percent, to 23.84 euros in Vienna, rebounding from a drop of as much as 19 percent.
Leisure & Gaming Plc, which owns betting brands including VIPsports, dropped 22.5 pence, or 31 percent, to 51 pence in London. 888 Holdings Plc, the largest online casino operator, slid 24 pence, or 14 percent, to 147 pence.
The U.S. government views Internet gambling as illegal under a 1961 law that bars the use of telephone lines to make interstate wagers. Sports betting triggered the only case in which someone has been tried and jailed in the U.S. for running an illegal Web gambling business, Greg Harris, an analyst at Canaccord Adams in London, said when Carruthers was charged.
NFL Season
Dicks, whose detention was announced on the same day that the U.S. National Football League starts its season, was visiting the U.S. for reasons unrelated to Sportingbet, the company said in the statement. Betonsports' Carruthers was detained in Dallas while changing planes on a trip.
Investors had believed Betonsports was ``totally different to what Sportingbet does,'' Dresdner Kleinwort's Lee said.
Along with Carruthers, the Betonsports indictment named people including company founder Gary Kaplan, who allegedly has not paid federal wagering excise taxes on more than $3.3 billion in bets taken from the U.S. The indictment seeks the forfeiture of $4.5 billion from Kaplan and other co-defendants.
Dicks became non-executive chairman of Sportingbet.com Plc, as the company was known, in January 2000 and also is chairman of Daniel Stewart Securities Plc.
Jay Cohen, the former president of online bookmaker World Sports Exchange, is the only person to be jailed for running an illegal Internet gambling business in the U.S. He was among 14 people charged in March 1998 and was convicted in February 2000. Cohen unsuccessfully appealed his 21-month sentence all the way to the Supreme Court.