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LONDON - Sportingbet PLC is making a bet that there is no future in online gambling in the United States. The British company said Friday it sold its U.S. operations for $1 following legislation to ban Internet gambling in the United States.
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By unloading its U.S. sports-betting, casino and poker business to Antigua-based Jazette Enterprises Ltd., Sportingbet is taking $13.2 million of debt off its books and saving the company the $14 million cost of closing down the operations.
But it is also hedging its bet: If President Bush decides to veto the Unlawful Internet Gambling Enforcement Act passed by Congress, Sportingbet said it would reclaim its U.S. operations from Jazette for a payment of $500,000.
Sportingbet, which did 60 percent of its business in the U.S., said it will keep its European sports, casino and poker businesses, Australian sports business and the non-U.S. business of Paradise Poker.
Sportingbet shares rose 7.7 percent to 70 pence ($1.30) in morning trading on the London Stock Exchange.
The decision to exit the U.S. comes five weeks after Peter Dicks, the former chairman of Sportingbet, was arrested in New York after customs officials discovered he was wanted by Louisiana state police for illegal online gambling.
A judge later cleared Dicks to return to London after New York Gov. George Pataki declined to sign a warrant extraditing him to Louisiana. Pataki said New York state's law only permitted extradition if the person was physically present where he is accused of breaking the law.
Andrew McIver, Sportingbet's chief executive designate, said in a statement that the company was "saddened to have to dispose of such a fantastic business as a result of political actions in the U.S. Congress." The U.S. businesses have a total 500 employees.
"The sale however, prevents significant closure costs which would have been both expensive and time consuming. It also preserves the employment of ... colleagues who have worked so hard to build the U.S. operations into the highly profitable business it is today," McIver said.
Sportingbet will retain the Internet addresses and intellectual property of wallstreet.com, aces.com and sportingbetUSA.com, but won't use them for any U.S. gaming purpose. Jazette has agreed not to take bets from non-U.S. residents for two years, and not to take bets from customers outside the Americas for three years.
Sportingbet will keep its Paradise Poker business, marketing it in Canada, Europe and other markets, but will stop taking bets from U.S. customers as of Friday.
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By unloading its U.S. sports-betting, casino and poker business to Antigua-based Jazette Enterprises Ltd., Sportingbet is taking $13.2 million of debt off its books and saving the company the $14 million cost of closing down the operations.
But it is also hedging its bet: If President Bush decides to veto the Unlawful Internet Gambling Enforcement Act passed by Congress, Sportingbet said it would reclaim its U.S. operations from Jazette for a payment of $500,000.
Sportingbet, which did 60 percent of its business in the U.S., said it will keep its European sports, casino and poker businesses, Australian sports business and the non-U.S. business of Paradise Poker.
Sportingbet shares rose 7.7 percent to 70 pence ($1.30) in morning trading on the London Stock Exchange.
The decision to exit the U.S. comes five weeks after Peter Dicks, the former chairman of Sportingbet, was arrested in New York after customs officials discovered he was wanted by Louisiana state police for illegal online gambling.
A judge later cleared Dicks to return to London after New York Gov. George Pataki declined to sign a warrant extraditing him to Louisiana. Pataki said New York state's law only permitted extradition if the person was physically present where he is accused of breaking the law.
Andrew McIver, Sportingbet's chief executive designate, said in a statement that the company was "saddened to have to dispose of such a fantastic business as a result of political actions in the U.S. Congress." The U.S. businesses have a total 500 employees.
"The sale however, prevents significant closure costs which would have been both expensive and time consuming. It also preserves the employment of ... colleagues who have worked so hard to build the U.S. operations into the highly profitable business it is today," McIver said.
Sportingbet will retain the Internet addresses and intellectual property of wallstreet.com, aces.com and sportingbetUSA.com, but won't use them for any U.S. gaming purpose. Jazette has agreed not to take bets from non-U.S. residents for two years, and not to take bets from customers outside the Americas for three years.
Sportingbet will keep its Paradise Poker business, marketing it in Canada, Europe and other markets, but will stop taking bets from U.S. customers as of Friday.