Online gambling stocks took a hammering yesterday after US authorities arrested a second internet gambling director, Sportingbet's chairman Peter Dicks, amid a crackdown on what they regard as an illegal activity.
The 64-year-old Briton was held on internet gambling charges at New York's John F Kennedy International Airport late on Wednesday as part of an ongoing investigation into Sporting-bet. The move came two months after the surprise arrest of the BetonSports chief executive, David Carruthers, in Texas. Sportingbet shares were immediately suspended at the company's request, while other sector stocks plummeted on the news.
An arrest warrant for Mr Dicks and others was issued by Louisiana in May, said Senior Trooper Dwight Robinette of the Louisiana State Police. The arrest warrants are sealed and there are no indictments, he said. Mr Dicks was due to appear in state court in Queens, New York, yesterday evening. He was being held by Port Authority police in New York, awaiting transfer to Louisiana. Sportingbet said he had travelled to the US on non-company business.
The surprise arrest of Mr Carruthers and the indictment against him, BetonSports and a dozen executives on charges of illegally running an online and telephone sports betting operation, immediately triggered fears that US authorities would clamp down on other companies in the online gambling industry. Most are listed in London while they get the bulk of their business from American punters, and have been careful to base themselves offshore to escape possible prosecution for what is a legally grey area in the US.
BetonSports' much larger rival Sportingbet has seen its market value halve from nearly pounds 2bn at its peak earlier this year in the wake of the indictment against BetonSports, which was targeted by the US authorities mainly for its telephone sports betting operation. This is explicitly banned under the 1961 Wire Act, although rhetoric from the US Department of Justice suggests it regards all internet gambling as illegal.
Mr Dicks' detention …