Peter Dicks, Non-Executive Chairman of Sportingbet, has been arrested in New York on a fugitive warrant issued by the Louisiana State Police for internet gambling charges. Dicks was visiting the US on non-Sportingbet business. Police sources said that the charges are part of an ongoing investigation into Sportingbet.com and are related to Louisiana’s strict laws on gambling by computer.
The move comes two months after BetonSports Chief Executive David Carruthers was arrested at Dallas Airport en route to Costa Rica. Like BetonSports, Sportingbet accepts online bets from US customers and generates a large majority of its earning in America.
“Clearly the first indictment against BetonSports was not a company-specific issue,” said one London analyst who declined to be named.
“You can actually safely assume now that the DoJ are going after every single online gaming company. I think that is a fair and safe bet to assume that and I think it\’s very unfortunate,” added Wayne Brown, analyst at Altium Secutities.
While Sportingbet\’s shares had been immediately suspended from trading on AIM, shares in rival online gambling companies fell sharply following news of Dicks\’ arrest, with PartyGaming, 888 Holdings, Playtech, Leisure & Gaming, NETeller and FireOne all down more than 10%.
In Austria, where BWin shares were down 12% to EUR 23.75, a spokesperson for the online sportsbook blamed the share price slump on ongoing investor uncertainty. “In general, I think people are simply scared, and a lot of investors may not be aware that we don\’t offer sporting bets in the US.”
News of Dicks\’ arrest came just hours after Sportingbet unveiled a plan to buy World Gaming in a deal worth as much as £56.6m. Following the news of the arrest, shares in the online gaming software provider lost over 30%.
Speaking to iGaming Business, leading gaming lawyer Hilary Stewart Jones of Berwin Leighton Paisner said that the arrest of Sportingbet’s Peter Dicks “might have happened thanks to the particular political climate with the Goodlatte/Leach Bill still on the block.”
In the first session since the August recess, Senate Majority Leader Bill Frist targeted the ban on internet gambling as a top priority for the US Senate. With just 20 working days left before the November mid-term elections, the Senate faces a crowded agenda including 13 different funding bills.
While Frist said he hoped to bring up the bill for a vote “with very little debate” by limiting the time available for floor discussion of the legislation, some Republican senators have placed holds on the bill which prevent it from being brought up for a vote until concerns about the measure are resolved.
Both the Senate and the House of Representatives have a tentative October 9 adjournment date.
In separate news, David Carruthers\’ evidentiary hearing before U.S. Magistrate Judge Mary Ann Medler has been postponed to January 22, 2007.
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