Sportingbet Chairman Is Held by US AuthoritiesBy Dan Weeks
Sept. 7 (Bloomberg) -- Sportingbet Plc mentioned Chairman Peter Dicks was detained in the U.S., the second manager of a British firm 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 mentioned in a statement. A spokesman for the firm declined to elaborate on the circumstances 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 this includes racketeering and scam. 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 costs unrelated to online gaming, we can possibly assume the Department of Justice has an agenda contrary sports-betting companies that are using telephone lines to make bets'' mentioned 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 were not immediately replied before business hours today.
London-based Sportingbet, which first sold shares to investors in January 2001, permitted almost 150 mlln. Sports and gaming wagers in the fiscal third quarter that finished April 30. About four-fifths of purchasers are American. Betonsports mentioned last month it would shut down units that take bets from the U.S.
The number of American consumers who used Sportingbet's Web sites to bet on athletics rose 51 percent from a year previously to almost 165,000 in the quarter. Sports wagers numbered 8.2 mlln. and averaged $51 in size.
Sportingbet, which has a market value of 1 billion pounds ($1.9 billion), generated the announcement today in a statement after asking for its shares to be suspended. Shares of PartyGaming Plc, the world's largest Internet poker firm, came down as much as 19 percent in London.
Online gambling has turned a $12 billion-a-year industry for companies this includes 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 authorized a decision to stifle online gambling by restricting the flow of cash to illegal gaming Web sites.
Rivals' Shares Slide
PartyGaming stock decreased 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 this includes VIPsports, came down 22.5 pence, or 31 percent, to 51 pence in London. 888 Holdings Plc, the biggest 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 utilization of telephone lines to make interstate wagers. Sports betting triggered the only case in which somebody 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, mentioned when Carruthers was charged.
Dicks, whose detention was announced on an identical day that the U.S. National Football League starts its season, was giving a visit to the U.S. for circumstances unrelated to Sportingbet, the firm 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 mentioned.
Along with Carruthers, the Betonsports indictment named people this includes 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 firm was known, in January 2000 as well as 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 alternative to the Supreme Court.
To contact the reporter on this story: Dan Weeks