Peter Dicks has pleaded not guilty to the charges brought against him by Louisiana authorities. The Non-Executive Chairman of Sportingbet has been arrested in New York while he was on his way to a board meeting of Standard Microsystems, a publicly traded company where he serves as a director, and charged with gambling by computer, a crime punishable by up to 5 years in prison.
Peter Nieman, the lawyer for Peter Dicks, said his client will contest extradition to Louisiana and will ask a New York Supreme Court justice to release his client on bail.
“There are only a few states that have real clear statutes on the books that make operating gambling sites a felony,” said Nelson Rose, a gaming law expert at Whittier Law School. Louisiana is one of them with Nevada, Michigan, Illinois, South Dakota, Oregon, Indiana and Washington.
“State authorities may find it difficult to pursue charges against Dicks,” said Lawrence Walters, a Florida lawyer who focuses on internet gambling law.
“Courts have ruled state law can\’t be applied to Internet transactions because such activity falls under the Commerce Clause in the Constitution,” Walters added.
“Online gaming will not end unless they prosecute every one of the 50 million Americans who bet online every year,” commented Andrew P. Lee, online gaming analyst at Dresdner Kleinwort. “But from an investor’s perspective this becomes a very difficult sector to invest in.”
Walters added that there was good reason for investor concern, considering the fact that online gaming sites assumed they only needed to worry about federal law, while the arrest of Dicks indicates that now they have to be concerned about problems at state level as well.
Walters does not believe that states have the jurisdiction to regulate internet gambling. However, he thinks that online sportsbetting and casino operators will ultimately have to re-evaluate their legal positions.
It is interesting to note that after the arrest of BetonSports Chief Executive David Carruthers, industry experts and commentators all presumed that the US effort was aimed at one specific company, BetonSports, mostly because of the chequered past of its founder Gary Kaplan.
“We thought this was company specific. Now we know it’s broader than that,” said Sue Schneider, President and CEO of River City Group, the publisher of IGaming News.
“There was a feeling that indictment [BetonSports] was part of an attack by the authorities on that company and certain politicians in the US took the opportunity to have a go at the online industry generally,” gaming lawyer Peter Wilson told iGaming Business.
“People were a bit unsure as to whether it was part of a wider campaign. This arrest [Dicks] now gives a bit more evidence of their being a more generalised campaign against online gambling, but again I don’t think it’s conclusive,” added Wilson.
Ken Dreifach, formerly with the New York Attorney General office and now a lawyer specialized in the rights of private operators under proposed iGaming laws, pointed out that the arrest could mark the expansion of the US Government\’s anti-internet gambling efforts against others sectors of the online gambling industry beyond sports books.
“This certainly isn\’t an isolated incident,” said Dreifach. “Which piece of the industry is next? Will they go after payment processors? Financial institutions?”
Frank Catania, online gaming industry consultant, said he believes the arrests of Carruthers and Dicks are a political move by a Republican administration fearful of losing the U.S. House of Representatives in November elections.
“I think what they\’re trying to do is to appeal to their conservative [voter] base,” said Catania.
Andrew McIver, Sportingbet Finance Firector, said he would not travel to the US until the charges are resolved.
“The Louisiana laws involved are incredibly wide ranging,” he told Reuters. “It covers practically any form of doing anything involving any sort of gaming and a computer.”
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