|
Breaking News
Sportingbet finance chief expects U.S. arrest warrant
Wednesday September 27, 03:27 PM
LONDON (Reuters) - Sportingbet's Finance Director Andy McIver is working on the assumption that the U.S. state of Louisiana has a warrant out for his arrest on online gambling charges, he said in an interview on Wednesday. "I'm personally working on the assumption that it is a stronger possibility rather than a weaker possibility," McIver told Reuters by phone from London when asked whether he expected Louisiana to have a warrant out for his arrest.
"We have now formally said that no board member is to go to the United States following the arrest of Peter Dicks," said McIver, who is due to take over as Sportingbet's chief executive in October.
"They said all along that there are other people," said McIver. "They said all along that it is us as a company. Therefore I assumed that, as one of what is a handful of executive directors, I would be one of them. But I don't know."
Sportingbet shares fell by as much as 3.1 percent on Wednesday, but by 1400 GMT (3 p.m. British Time) they were down by just 1.4 percent at 176-3/4 pence, valuing the group at around 745 million pounds.
EXTRADITION OUTLOOK
Lawyers say U.S. prosecutors would not be able to extradite Sportingbet's executives from the UK because they have not been charged with anything illegal under British law.
Only by adding a crime such as fraud to the charge sheet would extradition be possible, they say.
McIver's comments follow a week of negative sentiment for the online gaming sector.
On Monday, Sportingbet's merger target World Gaming said its chairman and a director had resigned, and on Tuesday Empire Online told Reuters it was reining back its aggressive acquisition plans and considering safer options for its $250 million war chest.
On Tuesday, London's upmarket Ritz Hotel said it had closed its online gaming site due to legal uncertainty.
McIver said U.S. law on online gaming had not changed either at a federal level or at a state level in Louisiana, which has had anti-online gambling laws since 1997.
"Until something fundamentally changes -- some law goes through the Senate or if the courts take a different view -- then maybe we'll rebalance strategy," he said. "We'd review the situation."
Ex-Sportingbet chief waits for the wheel of fortune to turn
The focus is once again on the online gaming sector this week, as former Sportingbet chairman Peter Dicks (pictured below) returns from the UK to New York to hear the outcome of an extradition request.
Mr Dicks was arrested earlier this month as part of a crackdown on internet gambling, which is technically illegal in the US. He stepped down as chairman following his arrest, and was allowed to return home. On Thursday, however, a New York State judge will rule on a request by the State of Louisiana to extradite him. Sportingbet's rival BetonSports is also caught up in the crackdown: its now-former chief executive, David Carruthers, was arrested recently too.
According to the Times, another 50 Warrants Outstanding
The Times understands that Louisiana has a total of more than 50 warrants outstanding against executives from internet gambling
companies that have clients who live within the state's boundaries.
These warrants will remain sealed unless, as happened in the case of Mr Dicks, an arrest is made.
It is believed that those targeted by the warrants include other Sportingbet directors, including Nigel Payne, the chief executive,
and board members of companies including PartyGaming and 888 Holdings. John Anderson, the chief executive of 888, stepped down yesterday, although he denied the move was related to the US legal situation.
Dicks going home to UK for a while
A New York City criminal court judge ruled on Thursday that Peter Dicks, who resigned as chairman of British online gambling firm Sportingbet.com Plc(SBT.L: Quote, Profile,
Research) earlier in the day, can leave the country and return to Britain.
Dicks, who was arrested last week and charged with "gambling by computer" under Louisiana state law, must return to the United States on Sept. 28 for a hearing in New York on a motion to extradite him to Louisiana
The court appearance came a day after New York Gov. George Pataki received a formal request from Dicks and his attorney, Barry
Slotnick, to withdraw a warrant of arrest the governor had signed that would allow Dicks' extradition to Louisiana.
Slotnick said he and his client argued that Louisiana's request for extradition 'is inappropriate and that Peter Dicks has not committed any crimes there or anywhere. He hasn't been in Louisiana for 20 years.'
On Thursday in court, Dicks was informed that the governor had withdrawn the warrant. Restrictions on Dicks' $50,000 bail that barred him from leaving New York also were lifted.
'There is nothing pending in terms of any accusations against Dicks in the state of New York,' Slotnick told The Associated Press, adding that Dicks was now free to travel back to London, where he lives.
When he's back in court later this month, Slotnick said, 'it's our hope that the (Louisiana) warrant at that time will be totally
withdrawn.'
Slotnick said Dicks is appearing in court New York on Sept. 28 only 'because Louisiana is requesting his presence. But the only one
who can order him to Louisiana is Gov. Pataki.'
Sportingbet Plc
14 September 2006
Further to its recent announcements regarding Mr Peter Dicks, Sportingbet confirms that, with great reluctance, at 2.25 p.m. today, the Board accepted the resignation of Mr Dicks as Independent Non-executive Chairman of Sportingbet with immediate effect. Mr. Dicks indicated that he wishes to
concentrate on personal matters. The Board will announce a new Independent Non-executive Chairman in due course.
Dicks battles extradition
Mr Dicks is scheduled to be back in court on Thursday, when he will seek to block an attempt by the state of Louisiana to have him
extradited from New York.
His lawyers are expected to argue that Mr. Dicks should never have been arrested because he was a non-executive director and was travelling to a board meeting of the Nasdaq-listed Standard Microsystems, of which he is also a director.
They will also point out that he is being pursued by a state that allows state-run lottery terminals and video lottery machines that are commissioned and controlled by the gaming enforcement division of the state police. Unlike David Carruthers, the former BetOnSports chief executive, who is being pursued by the Department of Justice, Mr Dicks has avoided federal charges.
CEO Released on Bail
NEW YORK, Sept 8 (Reuters) - The chairman of Sportingbet Plc was granted $50,000 bail in a New York court on Friday, according to court documents.
Peter Dicks, who was arrested and detained in New York on Thursday, has been charged with gambling with a computer as part of an investigation by Louisiana authorities.
Dicks is set to appear at a hearing before a New York City Criminal Court on September 14 to decide whether he can be extradited to Louisiana.
Dicks, who is also chairman of London-based Daniel Stewart Securities Plc, surrendered his British passport, a condition of his bail. Latella ordered him to remain in the New York metropolitan area as he awaits a Sept. 14 hearing on whether he should be extradited to Louisiana.
Dicks said the freedom of movement granted him by the judge was "more than adequate.''
Dicks's lawyer, Peter Neiman of the Washington firm of WilmerHale, told the judge that his client's willingness to travel in the U.S. so soon after Carruthers's arrest showed that Dicks didn't believe he had done anything wrong.
"There are serious questions regarding whether New York's extradition statute permits extradition for conduct allegedly
committed entirely overseas,'' Neiman argued in requesting bail.
Neiman told the judge that Dicks hadn't been in Louisiana for more than 20 years, long before he joined Sportingbet.
Dicks' bail request was supported by two letters of recommendation. Steven J. Bilodeau, the chief executive of Standard Microsystem
Corp., based in Hauppauge, New York, wrote that Dicks ``historically has exhibited the highest character and integrity.'' Dicks is a
Standard Microsystem board member.
Sportingbet under fire NEW YORK (Reuters) - The chairman of online bookmaker Sportingbet.com , Peter Dicks, was arrested in New York late on Wednesday on Internet gambling charges, an officer with the Louisiana State Police said on Thursday.
Dicks was "picked up by U.S. Customs for charges that our Gaming Enforcement division was doing as part of an ongoing investigation on Sportingbet.com," Senior Trooper Dwight Robinette of the Louisiana State Police, said.
Robinette said the arrest warrant was issued for Dicks and others in May. The arrest warrants are sealed and there are no indictments, he said.
Robinette said other warrants have been issued in the investigation, but declined to name any of the other individuals charged.
Peter Dicks was arrested at Kennedy International Airport following his arrival on a flight from England, Queens district attorney spokesman Kevin Ryan said Thursday.
Customs, performing a routine name check around 11:30 p.m. Wednesday, discovered he had an outstanding warrant issued by the Louisiania State Police Gaming Enforcement Division.
Police officers with the Port Authority, which runs the airport, took Dicks into custody, where he remained Thursday awaiting arraignment in a state court.
Ryan said the July 12 warrant charged Dicks, who lives in London, with gambling by computer, which is punishable by up to a year in prison.
A message left with Senior Trooper Dwight Robinette Jr., spokesman for Louisiana State Police, was not immediately returned.
Analyst Comments Andrew Lee, an online gaming analyst at Dresdner Kleinwort in London, sees this as a vendetta by the Department of Justice in U.S against all the sports-betting companies. "Unless the chairman is being held on charges unrelated to online gaming, we can probably assume the Department of Justice has an agenda against sports-betting companies that are using telephone lines to make bets', he said.
Daniel Stewart sees no impact from US arrest of non-exec chairman Peter Dicks LONDON (AFX) - Daniel Stewart Securities PLC said it notes the recent detention by US Authorities of Peter Dicks, the group's non-executive chairman. The company confirmed that Dicks was in the US on business unrelated to the company, and the directors of DSS believe that this will have no direct impact on the operations of DSS and its subsidiaries. (Ed Note Daniel Stewart have their heads up their asses...or maybe they own lots of SBT stock???)
Arrest Details
Peter Dicks, non-executive chairman of Sportingbet, was arrested at New York’s John F. Kennedy at around 4.35am Thursday morning British Standard Time.
The arrest was made by the 113th precinct of the New York Police Department. The warrant for his arrest was issued by the Louisiana state police, which is "repsonsible for enforcement of gaming legislation in the state", a spokesperson told eGaming Review. The charges are understood to be state-related rather than federal.
The arraignment hearing for Peter Dicks is due to take place from 6.30pm New York time at the Queens Criminal Court.
Sportingbet's Chairman Detained in NYC on Fugitive Warrant Issued by Louisiana
© 2006 The Associated Press
LONDON The chairman of online gambling company Sportingbet PLC has been detained by officials in New York on a fugitive warrant, two months after the chief executive of BetOnSports PLC was arrested in the United States on racketeering charges.
Queens District Attorney spokesman Kevin Ryan said Thursday that Peter Dicks was being held on a fugitive warrant issued by Louisiana and was scheduled for arraignment later Thursday.
Sportingbet chairman detained in U.S. - Sportingbet PLC, an online gambling company, said Thursday its chairman has been detained in the United States, two months after the chief executive of BetOnSports PLC was arrest in the U.S. on racketeering charges.
The company said a hearing has been scheduled for Sportingbet Chairman Peter Dicks, though no further details were given. The London Stock Exchange suspended trading in Sportingbet shares at the company's request.
Online gaming stocks dive as U.S. holds exec The United States detained a second Internet gaming executive on Thursday, adding to fears it is cracking down on the lucrative industry and sparking share price falls that wiped over $1.5 billion off the market value of the sector.
Shares reacted instantly across the $12 billion-a-year industry, with industry leader PartyGaming (London:PRTY.L ) plunging as much as 19 percent, 888 Holdings Plc (London:888.L) down as much as 18 percent and Playtech (London:PTEC.L) down as much as 17 percent.
Shares in Austria's bwin.com Interactive Entertainment (Vienna:BWIN.VI) also slumped.
"This arrest highlights the U.S. Department of Justice is going after online gaming companies by arresting their board members," said a London analyst who declined to be named.
Sportingbet said it had sought immediate temporary suspension of its shares pending clarification of the situation. Dicks was arrested at 0100 GMT on Thursday and his hearing is scheduled for 1300 GMT, it added without giving a location.
|
Commentary
House of cards is unfairly stacked against internet
By Nigel Payne for the London Times
Our correspondent argues that the recent spate of web-based gambling arrests is rooted in commercial protectionism
THE key to a proper understanding of what is happening in the internet gambling industry is to look at the agenda of some of those who seek to criticise it. I believe that the real picture that emerges is one of fiscal protectionism that is being masked by political manoeuvring and adroit public relations.
A good example is the often-quoted issue of under-age gambling. We are told that the industry is a social pariah, a danger to children.
Although internet gambling may provide the ability for minors to participate in unsupervised gambling, the truth is that the industry has long been able to demonstrate that it has the technology to mitigate such risks.
One company that offers this sort of technology is the respected American firm Aristotle, via its Integrity software platform.
Like the alcohol and tobacco industries before it, internet gambling has, with its partners, listened to the very real concerns that have been raised and addressed them. A regulator overseeing a properly regulated industry would be able to insist that such software be
used and monitor its application. And it works. Yet the politicians and authorities that raise this concern and seek to criticise the industry choose to ignore that there is a technological solution.
The US House of Representatives recently passed a Bill H.R.4411 to "ban internet gambling". A central pillar of the Bill was that
the industry is "a risk to the children of America". What struck me as odd was that the House never asked whether technology existed to mitigate the concerns. Moreover, the Bill lists a number of internet gambling activities, including horse racing and fantasy leagues, that would be exempt from any ban.
No explanation is offered about why such activities should be exempted, nor why children might be at risk from, say, a bet on a hand of poker but not from a bet on a horse race.
The situation is similar in Europe, including parts of Scandinavia, the Netherlands, Hungary and, more recently, France. In many of these countries the industry is portrayed as an evil business that targets the young and vulnerable, yet all have domestic internet
gambling businesses that are approved and licensed by the local government but without any obligation to provide social responsibility controls.
This protectionism is particularly evident in the United States. The so-called ban proposed in Bill H.R.4411 is not a ban at all, but a measure that authorises certain forms of internet gambling while excluding others. It expands internet gambling betting opportunities on racing, fantasy sports, lotteries and intrastate and intratribe gambling and yet fails to set a minimum age requirement. It is probably no coincidence that the exempted activities are almost exclusively controlled by US companies.
Ironically, by using restrictions on banks as one of its enforcement measures, the Bill is denying the industry access to the sort of
data that may prevent non-US gaming operators from verifying the age of potential customers, identifying problem gamblers and preventing money-laundering.
So what is the real driving force behind these exemptions? Consider fantasy sports. In my opinion, it meets the legal definition of gambling, is illegal under the US Professional and Amateur Sports Protection Act of 1992 and is almost certainly illegal under the Interstate Wire Act of 1961. Crucially, the professional sports leagues in America the same leagues that are lobbying hard for internet gambling to be banned receive direct and indirect revenues from fantasy leagues.
In July the National Football League started a service with Sprint, the telecoms company, to provide fantasy tracker updates via mobile
telephone a deal worth an estimated $600 million over five years to Sprint.
The actions being taken by governments to achieve their aims including Congress's "prohibition" Bill, the detention in France of
BWin's joint chief executives and the arrest of Peter Dicks, my former colleague, on a warrant issued in Louisiana run the risk of
compromising the most socially responsible operators and forcing punters to use companies that do not take such issues as seriously.
This industry operates over the world wide web, not over a country-specific web. Eventually governments will have to reach agreement about how this and other "www" industries are to be handled. Operators would welcome this. Most have offered to pay appropriate taxes and there is no question that operators would respect relevant
laws. But the price of this respect must surely be a level playing field.
Nigel Payne is the chief executive of Sportingbet
Enforcing Louisiana's online gambling
By Andrew Ward
Updated: 3:10 p.m. ET Sept. 26, 2006
Louisiana's investigation into online gambling originated in a routine staff meeting this year, when Captain Joe Lentini of Louisiana's Police Gaming Enforcement division reminded officers of the state's law against online gambling.
"I saw that this was a growing problem so I told our staff that I wanted them to find out if these sites were taking bets online from
Louisiana," says Mr Lentini, who heads the division's casino section.
Over the next several months, agents have been trawling the internet to find gambling sites that are prepared to flout state laws
by accepting bets in Louisiana.
Sportingbet, the UK-listed company whose former chairman, Peter Dicks, was arrested in New York this month on a Louisiana warrant,
was the first site that the agents snared.
"It was the luck of the draw," says Mr Lentini. "That was the first one that came up on the screen and it was one of the easiest ones to
find information about."
The warrant for Mr Dicks' arrest was issued in St Landry parish, a largely rural part of Louisiana's Cajun region, because that was
where agents were when they placed their bet with the British company.
"We told them that we were in Louisiana. We did not hide anything,"says Mr Lentini.
"Mr Dicks' website is taking bets from citizens of Louisiana. A lot of people say, 'how can you stop people doing that?' But there are
plenty of sites out there that do not accept bets from Louisiana citizens because they know it is illegal. They should be able to
identify any IP address that is in Louisiana. It is something that can be easily done but this site chose not to even attempt to stop us."
Mr Lentini says Mr Dicks is one of four individuals connected to Sportingbet that have had warrants issued for their arrest. He
declined to give their names but said it would be reasonable to assume they were executives or directors of the company.
Other companies are also being investigated, said Mr Lentini, although he did not know whether any further warrants had been issued so far. "We have agents all over the state working this daily," he says. "There are other sites we're looking into."
Louisiana's attempt to extradite Mr Dicks from New York has been held up by legal wrangling over the legitimacy of the warrant.
Mr Lentini says the problem involves a "glitch" in New York state lawsthat appears to allow extradition to another state only in cases
where the alleged crime was committed in one of the two states involved.
Mr Dicks' lawyers have argued that their client cannot be extradited because he has not been in Louisiana for more than 20 years and
therefore cannot have committed a crime there.
"Even if [Mr Dicks] wins this battle, other [suspects] coming to the US through other airports might have a different experience," says Mr Lentini.
Deep South rivals 'implicated' in arrest of Sportingbet boss
Nick Mathiason
Sunday September 17, 2006
The Observer
Dicks was arrested for alleged violation of the US Wire Act, which forbids gambling firms taking sport bets from US citizens by phone.
New York police acted on a warrant from Louisiana state officials and arrested Dicks.
Sources close to the investigation say that evidence against Dicks is not convincing enough for him to be extradited. They believe the state's lax attitude to gambling has created a thriving local industry and that Sportingbet's success may have antagonised local firms.
Dicks quits Sportingbet as bail is relaxed
By Michael Herman and Agencies in New York
Peter Dicks, who resigned earlier today as chairman of internet bookmaker Sportingbet, has been freed to return to the UK for two
weeks.
A judge removed Mr Dicks's bail restrictions this morning after it emerged that the New York Governor's office had withdrawn a warrant approving his extradition to Louisiana, Sportingbet said in a statement.
Judge Gene Lopez, sitting at the New York State Criminal Court in Queens, ordered Mr Dicks to re-appear on September 28 for a further extradition hearing.
However, according to Anand Doobay, an extradition expert at Peters and Peters, should Mr Dicks refuse to return to the US for the follow up hearing, he may be safe from extradition.
"The offence for which he was arrested - 'gambling by computer' - is not a crime in the UK and under UK extradition laws the Home
Secretary will only grant an extradition order if the activity which underlies the alleged offence would also be criminal in the UK," Mr
Doobay said.
The warrant for Mr Dicks's arrest in Louisiana remains active.
Neither Sportingbet nor The New York Governor's office has said why Mr Dicks's extradition warrant was withdrawn but lawyers were heard to suggest in court that it had been improperly compiled.
Sportingbet confirmed that it had accepted Mr Dicks's resignation in a statement earlier this afternoon. The company said that Mr Dicks
quit "to concentrate on personal matters" but it is understood that he did so on legal advice because it would strengthen his case.
Mr Dicks was arrested at JFK airport in New York last week whilst travelling on business unrelated to his role as non-executive
chairman of Sportingbet. He was freed on $50,000 bail on Friday but required to remain in New York until today's hearing.
Mr Dicks became the second senior company director from a UK gaming firm to be arrested in the US, following the detention of former
BetonSports chief executive David Carruthers in April.
Mr Carruthers, who was fired following his arrest, was held in US custody for a month before being released on $1 million bail in
August.
Unlike Mr Dicks who is wanted for violation of state charges, Mr Carruthers was detained on suspicion of breaking federal laws in an investigation involving the FBI and US Department of Justice.
Online Gambling Remains Risky Business
Oxford Analytica 09.13.06
Legal officers on Sept. 6 arrested Peter Dicks, non-executive chairman of online gambling company Sportingbet, on Louisiana state charges of gambling by computer. Growth of the Internet gambling sector in the United States and Europe continues to be shadowed by regulatory and legal issues, which are unlikely to be resolved in the near term.
Online gambling sites offer various products, and about half their wagers are made by U.S.-based customers. Currently, the sector comprises about 2,000 sites, and Christiansen Capital Advisors estimates it accounted for $12 billion in global revenues in 2005.
The largest online gambling operators have successfully listed their shares for sale on the London Stock Exchange. However, significant regulatory uncertainties remain in both the United States and the European Union that may hamper the industry's long-term growth prospects.
The United States has in place an array of federal and state regulations that apply to gambling:
-- Justice Department position. The U.S. Justice Department contends that online gambling is banned outright under the terms of the U.S. Wire Act of 1961. The 1961 legislation does prohibit companies from accepting wagers on sporting events across state or international lines, but it is silent on the issue of casino games. A 2002 decision by the U.S. Court of Appeals for the Fifth Circuit rejected a broad interpretation of the Wire Act, limiting its prohibition to sports betting online. Nonetheless, the Justice Department interpretation has prevented state-level efforts to develop a regulatory regime for online gambling.
-- State positions. Several states have statutes in place that ban online gambling. Other state legal officers have suggested they might jump into the online gambling fray by interpreting other broadly drafted state anti-gambling statutes to apply to online activities. Until these and other issues are resolved, the operating legal environment for the industry will remain complex.
-- Congress. Online gambling industry representatives have previously called for regulation of the industry. Furthermore, online gambling could provide a potential new lucrative source of tax revenue.
However, Congress has thus far rejected this approach in favor of an outright ban. In July, the House of Representatives passed a measure that would:
--clarify that the 1961 Wire Act prevents companies from accepting online wagers;
--bar credit-card companies from processing payments to online gaming sites; and
--ban banks from processing electronic funds transfers or e-checks for online gambling transactions.
A similar measure is pending in the Senate but faces significant opposition.
Of more importance, the banking sector has voiced strong opposition to provisions that require banks to block electronic funds transfers or e-check payments to online gambling sites. These provisions are essentially broad and unenforceable, the banks claim; moreover, even if it were possible to surmount technical obstacles, prospective gamblers could easily use alternative means to finance such transactions.
No bill is likely before the end of this legislative year, leaving the online gambling issue to the new Congress, which convenes in January 2007.
EU member states have historically taken a less restrictive attitude to betting in general and sports betting in particular. However, the failure to include gambling in the EU services directive counts as a substantial missed opportunity to clarify and harmonize the EU-wide regulatory approach to the entire gambling sector:
--Many member states have longstanding monopolies and are opposing opening their gambling sectors to new competitors.
--The EU Commission must rely on its own intervention to tackle problematic member-state practices in the broader gambling sector.
--Whereas some EU member states have updated their regulatory regimes to provide effective oversight for online gambling, others have passed legislation that entrench established discriminatory practices.
The formidable opposition of the banking lobby will likely prevent the U.S. Congress from adopting comprehensive yet essentially unenforceable restrictions on payments in an attempt to limit online gambling activities.
Uncertainty over the future regulatory approach to be pursued in both the United States and the EU will continue to make investing in online gambling companies highly risky.
Sportingbet arrest unconnected to wider crackdown on Net gaming
By Julia Kollewe in London and Stephen Foley in New York
Published: 09 September 2006
Louisiana state police insisted yesterday that the arrest of Sportingbet's chairman, Peter Dicks, was unconnected to the US Justice Department's action against BetonSports.
Mr Dicks, 64, was granted $50,000 (£27,000) bail in New York while he fights extradition to Louisiana on criminal charges of illegal internet gambling. He was released on bond by New York Supreme Court Justice John Latella yesterday after spending Thursday night in jail in New York.
Sportingbet scrapped all travel plans to the US for its directors after the shock arrest of its chairman, but the online gambling firm carried on taking bets from US punters.
Mr Dicks is the second online gambling director to be arrested as US authorities crack down on the sector. The news wiped millions of pounds off London-listed gaming operators. Sportingbet's finance director, Andy McIver, said: "Until this is resolved I won't be travelling to the US." He added: "The Louisiana laws involved are incredibly wide-ranging. It covers practically any form of doing anything involving any sort of gaming and a computer."
By contrast, David Carruthers, the former chief executive of BetonSports, who was was arrested by the FBI in Dallas in July, was charged under a federal indictment and is being held under the 1961 Wire Act, which explicitly bans telephone sports betting. BetonSports fired Mr Carruthers soon after his arrest and shut down its US operations, which made up the bulk of its business.
Its much bigger rival, Sportingbet, which gets two-thirds of its revenues from the US, carried on as usual yesterday and is considering re-listing its shares next week after suspending them on Thursday. The company stressed the charge was against Mr Dicks by name and that it had not been contacted on the matter.
Mr Dicks, arrested at John F Kennedy International Airport on Wednesday night, appeared before a state court in Queens, New York, the following night. His lawyer, Peter Neiman, argued: "He is really not a flight risk. This is not some mobster who has connections to the crime world."
Mr Dicks has refused to be voluntarily transferred to Louisiana, invoking habeas corpus and pledging to appeal. Louisiana police said they would ask the state governor to issue a warrant for Mr Dicks' extradition, which could come early next week.
Dwight Robinette, senior trooper at the Louisiana state police, said Mr Dicks' arrest was unrelated to the federal case brought against BetonSports. "It is coincidental that the Department of Justice had an arrest two months ago," Mr Robinette said. "Our investigation is in no way, shape or form related."
Louisiana police began investigating Sportingbet in January, and officers set up internet gambling accounts as they tried to amass evidence against the company under the state's laws against gambling by computer. The charges carry a maximum sentence of five years in jail and a $20,000 (£11,000) fine.
Offshore gambling websites threaten the state's finances because it receives duties on bets taken within its borders. The state licenses 12 riverboat casinos and another four land-based casinos. The state attorney-general, a Democrat, Charles Foti, is a former sheriff who has introduced measures to counter gambling addiction.
Louisiana state police said arrest warrants were issued for Mr Dicks and other Sportingbet staff in May, but it was unclear who the others are. Other board members, including the chief executive Nigel Payne, the company founder Mark Blandford and Mr McIver, travelled to the US in July.
Sportingbet Chair Jailed as He Fights Extradition (Update1)
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.
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.
PartyGaming shares fell 11.5 pence, or 9.8 percent, to 105.75 pence in London yesterday, rebounding from earlier losses. Bwin Interactive Entertainment AG, an Austrian online bookmaker, slid 2.42 euros, or 8.9 percent, to 24.70 euros in Vienna after dropping as much as 19 percent earlier.
Leisure & Gaming Plc, which owns betting brands including VIPsports, declined 25.5 pence, or 35 percent, to 48 pence in London and closed at the day's lowest price. 888 Holdings Plc, the largest online casino operator, fell 27 pence, or 16 percent, to 144 pence. World Gaming dropped 27.5 pence, or 30 percent, to 64.5 pence.
To contact the reporter on this story: Andrew Dunn in New York at adunn8@bloomberg.net .
DEJA VU??? What was he doing in the US?
The small print on Sportingbet's 2001 float paperwork reportedly stated that that the directors had been advised that some of the firm's activities violated the federal Wire Act. "The penalties for violations of these statutes include the possibility of significant fines and imprisonment of relevant individuals," the documents were quoted by a newspaper as saying.
U.S. authorities have not yet explained their reasons for arresting Dicks. However Sportingbet has taken telephone bets in the past, and sports bets by phone seem to be one of the clearer grounds for prosecution of online gambling companies, according to experts. Dicks seems either to have not read the small print, or was at least one for taking big and, rather apparent, risks.
”We thought this was company specific. Now we know it’s broader than that,“ said Sue Schneider, the publisher of Interactive Gaming News, an online magazine that focuses on the Internet casino industry.
Ms. Schneider, echoing the sentiments of other industry analysts, had said the one obvious lesson after the arrest of Mr. Carruthers was that executives of online casinos should not visit the United States and risk arrest. She and other analysts and legal experts said it was mind-boggling that Mr. Dicks had visited anyway.
”It’s absolutely amazing,“ said I. Nelson Rose, a professor and Internet gambling expert at Whittier Law School in Costa Mesa, Calif. Mr. Rose speculated of Mr. Dicks: ”Apparently he convinced himself this all involved Carruthers and BetOnSports.“
|
Legal Documents
Here is the Law regarding online gambling in LA - Click here
Sportingbet PLC
11 September 2006
Statement regarding Chairman - Update
The Board of Sportingbet wishes to provide a further update with regard to the status of Mr. Peter Dicks, the Independent Non-Executive Chairman of Sportingbet Plc:
On Friday, 8 September 2006, at the request of Mr. Dicks' legal representative, Mr. Dicks attended a hearing of the New York State Supreme Court at which he was granted bail amounting to US$50,000 on condition that he surrender his passport and remain within the five boroughs of New York.
Mr. Dicks is expected to attend a further hearing on Thursday, 14 September 2006 to consider his transfer to Louisiana. Neither Mr. Dicks nor the Sportingbet Group has ever received any previous correspondence from any authority within the State of Louisiana regarding this or any other related matter. The Board believes that Mr. Dicks intends to vigorously contest this request.
The Group is closely monitoring the situation and continues to operate as normal.
At the request of the Group the temporary suspension of Sportingbet shares will be lifted immediately.
Further information will be issued in due course.
Enquiries:
Smithfield Tel: 020 7903 0669
George Hudson Tel: 07803 603 130
Statement regarding Chairman - Update
September 08, 2006
Following the announcement made yesterday regarding the detention of Mr. Peter Dicks, the Independent Non-Executive Chairman of Sportingbet Plc, the Board provides the following update and confirmation:
Mr. Dicks was detained at JFK Airport, New York, by officers of the Port Authority of New York, whilst traveling from London to the US on non-Sportingbet related business. Mr. Dicks has since attended a hearing in New York City. At this hearing he was served with a warrant for his arrest initiated by the Louisiana State Police for the alleged violation of Louisiana State laws relating to gambling by computer (LA R.S. 14:90.3(E), Gambling by Computer).
The charge is leveled against Mr. Dicks by name and a further hearing is expected next week.
The Group itself has not received correspondence from any US authority regarding this or any related matter. The Company is closely monitoring the situation and will continue to operate as normal.
Further information will be issued in due course.
Enquiries:
Smithfield (media) Tel: 020 7903 0669
George Hudson Tel: 07803 603 130
Sportingbet Statement regarding Chairman
RNS Number:6278I
Sportingbet PLC
07 September 2006
Sportingbet Plc
("Sportingbet" or the "Group")
Statement regarding Chairman
Whilst visiting the US on non-Sportingbet business, Mr Peter Dicks, aged 64, Non-Executive Chairman of Sportingbet Plc, was detained by US Authorities at approximately 2.00am BST on Thursday, 6 September 2006.
A hearing for Mr Dicks is scheduled for 2.00pm BST.
Pending clarification of the situation the Board has sought immediate temporary suspension of Sportingbet's shares.
Further information will be issued in due course.
For further information please contact:
Smithfield (media) Tel: 020 7903 0669
George Hudson Tel: 07803 603 130
|
