Sportingbet plc Chairman Arrested in New York

There was further financial fallout in the online gaming market as Sportingbet plc, a leading UK-listed online betting company with US-facing businesses, including Sportsbook.com, moved to have its shares suspended with immediate effect.

This followed news that the company's non-executive Chairman, 64 year old Peter Dicks, has been arrested in the USA while visiting New York on a matter unrelated to Sportingbet's business.

The resultant upheaval in the share prices of all companies with a connection to the online gaming industry has echoes of the day in July this year when David Carruthers, then CEO of BetOnSports plc, was similarly detained on USA shores.

Sportingbet plc have said the following about the arrest

"Following the announcement made yesterday regarding the detention of Mr Peter Dicks, the Independent Non-Executive Chairman of Sportingbet plc, the Board provides the following update and confirmation:

"Mr Dicks was detained at JFK Airport, New York, by officers of the Port Authority of New York, whilst travelling from London to the US on non-Sportingbet related business. Mr Dicks has since attended a hearing in New York City. At this hearing he was served with a warrant for his arrest initiated by the Louisiana State Police for the alleged violation of Louisiana State laws relating to gambling by computer (LA R.S. 14:90.3(E), Gambling by Computer).

The charge is levelled against Mr Dicks by name and a further hearing is expected next week.

The Group itself has not received correspondence from any US authority regarding this or any related matter. The Company is closely monitoring the situation and will continue to operate as normal.

Further information will be issued in due course."

It is interesting to note that, in its recent third quarter financial report, Sportingbet plc published the following comments about the current environment in the US:

"Notwithstanding this progress however, certain US politicians have introduced legislation designed to prohibit or restrict certain forms of internet gambling. The Board is increasingly of the view that such Bills have a large part of their foundation in protectionism and not the stated moral arguments. This is evidenced through exemptions in the Bills for the burgeoning domestic internet gambling industry on fantasy sports and horse racing. The Board remains of the view, however, that there are a substantial number of obstacles that remain in the path of these Bills becoming law."

Some members of the press commented at the time of the BetOnSports saga that executives of that company had been vociferous in their opposition of US gaming policy, speculating that such a stance will not have helped their cause. Is it possible Sportingbet have also rubbed the authorities up the wrong way with its views and that companies will have to watch what they say in future?

An alternative view is simply that Sportingbet plc owns a huge US-facing sportsbetting operation, including the world leader in US sportsbetting, Sportsbook.com. As that company states on its own website:

"This year we will accept over $3 billion in wagers. Tens of thousands of winning wagers are created daily for the 900,000 people that have joined our website. In July of 2001, Sportsbook.com was acquired by Sportingbet, a UK company which is publicly traded on the London Stock Exchange. Combined, Sportsbook.com and Sportingbet easily form the world's largest internet gaming company and one of the internet's most profitable companies."

The stakes have just got bigger!

Ed note: Top value and a bonus £20 bet are yours at VC Bet when you open a new account

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