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First the bad news:
Sportingbet Chairman Peter Dicks Jailed in New York (Update3)
By Andrew Dunn
Sept. 8 (Bloomberg) -- Sportingbet Plc Chairman Peter Dicks was jailed last night in New York as he fought extradition to Louisiana on criminal charges of illegal Internet gambling.
Dicks, 64, was arrested just before midnight Sept. 6 at John F. Kennedy International Airport in New York. Dicks is being held on a warrant filed in May in Louisiana as part of an investigation of illegal gambling, said Dwight Robinette, a spokesman for the Louisiana State Police.
Shares of online betting companies fell yesterday after Sportingbet said Dicks had been detained in New York. Sportingbet is the second foreign company to be caught in a government crackdown in the U.S. on illegal online gambling. U.S. officials say online betting sites may launder money and sell drugs, and lack safeguards to screen out minors and gambling addicts.
``This is kicking out another block in the foundation that online gaming is trying to build,'' said Joseph Weinert, editor of Gaming Industry Observer, a trade publication based in Atlantic City, New Jersey. ``This is more ammunition for those in Congress who seek to put the brakes on the industry.''
Dicks appeared in state court in Kew Gardens, New York, in Queens County, for a hearing last night to deal with whether he would be extradited to Louisiana. He plans to seek bail today while his lawyer Peter Neiman fights extradition.
Board Meeting
``This is far from the ordinary case,'' said Neiman, a former U.S. prosecutor now with the Washington firm of WilmerHale. ``He is not the type of person who would flee. This is not some mobster who has connections to the crime world. This is a highly reputable businessman from the United Kingdom.''
Dicks was in New York for a board meeting of a publicly traded U.S. company, Neiman said. Dicks is a board member of Standard Microsystems Corp. of Hauppauge, New York.
The charge Dicks faces in Louisiana carries a maximum penalty of five years in prison and a fine of $20,000, Neiman said.
``There are serious legal defenses'' to the crime alleged, Neiman told the presiding judge, Robert Raciti, who said he didn't have authority to grant bail to a fugitive. Raciti set a date of Sept. 14 to consider extradition. Neiman suggested a bail of $50,000. Raciti, a magistrate, said bail would have to be considered today by a justice of the court.
Another hearing is expected to take place next week, Sportingbet said in a Regulatory News Service statement today.
Additional Arrests
Dicks was arrested after stepping off a British Airways flight from London. U.S. Customs officials noticed the Louisiana warrant during a routine check and Dicks was taken into custody by Port Authority police.
Additional arrest warrants have been issued in the case and remain sealed, Robinette said.
Dicks joined Sportingbet as non-executive chairman in 2000, according to the company's Web site. He co-founded venture- capital firm Abingworth Plc and is a director of companies in the U.S. and U.K., including Polar Capital Technology Trust. He also is chairman of Private Equity Investor Plc, a London company that invests in computer and Internet companies.
Sportingbet said today it will continue to operate ``as normal.'' The London-based company hasn't received correspondence from any U.S. authority regarding Dicks' arrest or any related matter, it said in the statement today.
``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 professor at Whittier Law School in Costa Mesa, California. Louisiana is one of them.
New Bill
State authorities may find it difficult to pursue charges against Dicks, said attorney Lawrence Walters, a Florida lawyer who advises online casinos and poker rooms. Courts have ruled state law can't be applied to Internet transactions because such activity falls under the pre-empting Commerce Clause of the Constitution, Walters said.
The U.S. House of Representatives passed a bill to strengthen federal laws against Internet gambling. The Senate may take up the issue in the next two months.
Sportingbet stock slid 44 percent in two days in July after David Carruthers, then chief executive officer of U.K. Web bookmaker Betonsports Plc, was arrested and charged with crimes including racketeering and fraud.
A U.S. court ordered Betonsports to stop accepting wagers from the country, its main market, and return deposits to American gamblers. Betonsports said last month it would shut down units that take bets from the U.S.
$12 Billion Industry
Sportingbet, which has a stock market value of 1 billion pounds ($1.9 billion), announced that Dicks was being held yesterday in a statement after asking for the suspension of trading. Shares of PartyGaming Plc, the world's biggest Internet poker company, dropped as much as 19 percent in London yesterday.
Online gambling has become a $12 billion-a-year industry for companies including 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 approved a measure to stifle online gambling by restricting the flow of money to illegal gaming Web sites.
European online-gambling stocks were mixed following yesterday's declines. Bwin Interactive Entertainment AG, an Austrian online bookmaker, rose 1.79 euros, or 7.3 percent, to 26.49 in Vienna after sliding almost 9 percent yesterday.
888 Holdings Plc, the largest online casino operator, added 1 percent to 145.5 pence, recovering some of yesterday's 16 percent tumble.
World Gaming Plc, which slid 30 percent yesterday, lost a further 3.4 percent to 62 pence. PartyGaming, which closed 10 percent lower yesterday, fell another 0.2 percent to 105.5.
To contact the reporter on this story: Andrew Dunn in New York at [email protected] .
Now, the good news...Casino Windsor has opened a sportsbook.
America need to tax this stuff and get in on the action.
Sportingbet Chairman Peter Dicks Jailed in New York (Update3)
By Andrew Dunn
Sept. 8 (Bloomberg) -- Sportingbet Plc Chairman Peter Dicks was jailed last night in New York as he fought extradition to Louisiana on criminal charges of illegal Internet gambling.
Dicks, 64, was arrested just before midnight Sept. 6 at John F. Kennedy International Airport in New York. Dicks is being held on a warrant filed in May in Louisiana as part of an investigation of illegal gambling, said Dwight Robinette, a spokesman for the Louisiana State Police.
Shares of online betting companies fell yesterday after Sportingbet said Dicks had been detained in New York. Sportingbet is the second foreign company to be caught in a government crackdown in the U.S. on illegal online gambling. U.S. officials say online betting sites may launder money and sell drugs, and lack safeguards to screen out minors and gambling addicts.
``This is kicking out another block in the foundation that online gaming is trying to build,'' said Joseph Weinert, editor of Gaming Industry Observer, a trade publication based in Atlantic City, New Jersey. ``This is more ammunition for those in Congress who seek to put the brakes on the industry.''
Dicks appeared in state court in Kew Gardens, New York, in Queens County, for a hearing last night to deal with whether he would be extradited to Louisiana. He plans to seek bail today while his lawyer Peter Neiman fights extradition.
Board Meeting
``This is far from the ordinary case,'' said Neiman, a former U.S. prosecutor now with the Washington firm of WilmerHale. ``He is not the type of person who would flee. This is not some mobster who has connections to the crime world. This is a highly reputable businessman from the United Kingdom.''
Dicks was in New York for a board meeting of a publicly traded U.S. company, Neiman said. Dicks is a board member of Standard Microsystems Corp. of Hauppauge, New York.
The charge Dicks faces in Louisiana carries a maximum penalty of five years in prison and a fine of $20,000, Neiman said.
``There are serious legal defenses'' to the crime alleged, Neiman told the presiding judge, Robert Raciti, who said he didn't have authority to grant bail to a fugitive. Raciti set a date of Sept. 14 to consider extradition. Neiman suggested a bail of $50,000. Raciti, a magistrate, said bail would have to be considered today by a justice of the court.
Another hearing is expected to take place next week, Sportingbet said in a Regulatory News Service statement today.
Additional Arrests
Dicks was arrested after stepping off a British Airways flight from London. U.S. Customs officials noticed the Louisiana warrant during a routine check and Dicks was taken into custody by Port Authority police.
Additional arrest warrants have been issued in the case and remain sealed, Robinette said.
Dicks joined Sportingbet as non-executive chairman in 2000, according to the company's Web site. He co-founded venture- capital firm Abingworth Plc and is a director of companies in the U.S. and U.K., including Polar Capital Technology Trust. He also is chairman of Private Equity Investor Plc, a London company that invests in computer and Internet companies.
Sportingbet said today it will continue to operate ``as normal.'' The London-based company hasn't received correspondence from any U.S. authority regarding Dicks' arrest or any related matter, it said in the statement today.
``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 professor at Whittier Law School in Costa Mesa, California. Louisiana is one of them.
New Bill
State authorities may find it difficult to pursue charges against Dicks, said attorney Lawrence Walters, a Florida lawyer who advises online casinos and poker rooms. Courts have ruled state law can't be applied to Internet transactions because such activity falls under the pre-empting Commerce Clause of the Constitution, Walters said.
The U.S. House of Representatives passed a bill to strengthen federal laws against Internet gambling. The Senate may take up the issue in the next two months.
Sportingbet stock slid 44 percent in two days in July after David Carruthers, then chief executive officer of U.K. Web bookmaker Betonsports Plc, was arrested and charged with crimes including racketeering and fraud.
A U.S. court ordered Betonsports to stop accepting wagers from the country, its main market, and return deposits to American gamblers. Betonsports said last month it would shut down units that take bets from the U.S.
$12 Billion Industry
Sportingbet, which has a stock market value of 1 billion pounds ($1.9 billion), announced that Dicks was being held yesterday in a statement after asking for the suspension of trading. Shares of PartyGaming Plc, the world's biggest Internet poker company, dropped as much as 19 percent in London yesterday.
Online gambling has become a $12 billion-a-year industry for companies including 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 approved a measure to stifle online gambling by restricting the flow of money to illegal gaming Web sites.
European online-gambling stocks were mixed following yesterday's declines. Bwin Interactive Entertainment AG, an Austrian online bookmaker, rose 1.79 euros, or 7.3 percent, to 26.49 in Vienna after sliding almost 9 percent yesterday.
888 Holdings Plc, the largest online casino operator, added 1 percent to 145.5 pence, recovering some of yesterday's 16 percent tumble.
World Gaming Plc, which slid 30 percent yesterday, lost a further 3.4 percent to 62 pence. PartyGaming, which closed 10 percent lower yesterday, fell another 0.2 percent to 105.5.
To contact the reporter on this story: Andrew Dunn in New York at [email protected] .
Now, the good news...Casino Windsor has opened a sportsbook.
America need to tax this stuff and get in on the action.
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