As another publicly listed London company falls prey to the long arm of the US Judiciary's reading of the law, other online gaming companies and their shareholders must be wondering if it is sports betting or online gambling as a whole that is in the gun sights. With the ex CEO of BetonSports, David Carruthers, languishing in Missouri, it is now the turn of Sportingbet’s Chairman Peter Dicks to be detained in the US. One thing must be a dead cert: few online gaming executives will be alighting on American soil any time soon.

Peter Dicks was arrested at JFK Airport yesterday and has appeared before New York City Criminal Court. Next Thursday there will be a hearing on his extradition to Louisiana. Sealed arrest warrants were issued for Mr Dicks and others in May, and Internet gambling charges have been cited. It is not yet known whether these charges are related to taking sports bets from US citizens, where it could be asserted that the Wire Act 1961 can be invoked, or to all online betting by US citizens, considered illegal by some but with no actual basis in law.

So far US legislators have failed to agree a bill that would outlaw online gambling. The latest was approved by the House but is running out of time for a vote in the Senate before US elections. News of yesterday’s arrest caused a 19% drop in value of PartyGaming shares, despite that day’s publication of strong half year results. Other listed online gaming companies saw similar falls. Sportingbet, listed in 1998, has sought immediate temporary suspension of its shares.

The warrant against Peter Dicks was issued by the gaming enforcement division of Louisiana police and the charge is reportedly ‘gambling by computer’ with up to five years' imprisonment and a fine of US$20,000 as the penalty. Whilst this is a far less severe charge than that of federal racketeering offences faced by David Carruthers, it could suggest that sports betting is not the only form of Internet gambling in the firing line.

In May this year Nigel Payne, Sportingbet’s CEO but due to become Executive Director responsible for regulation and business development in October, commented on results to 30 April 2006: “The further development of our product offering, with the introduction of a new casino suite and in-running betting for our US facing brands, should further enhance our customer focused product offering.”

At present much of the US$12 billion industry is revenue from US citizens and online gambling providers with US facing businesses seem to have cause for concern. However, it’s a wide world and the industry is expanding rapidly outside the US. With many jurisdictions preparing to legitimise the industry by regulating it, including the UK, the set-back to business may prove merely temporary. (E-09.08.06)

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