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Recent Arrest Worries Gaming Industy

Friday, September 8th, 2006

Recent Arrest Worries Gaming Industy

Gambling industry experts agree: If you operate an offshore gaming Web site, stay out of the U.S.

Moments after stepping foot on American soil Thursday, Sportingbet PLC Chairman Peter Dicks became the second British offshore sports betting executive arrested in recent months for illegal online gambling in the U.S. Former BetOnSports PLC Chief Executive Officer David Carruthers was arrested on federal charges in July.

It’s still unclear if the arrest is a coincidence or part of a government crackdown, but some experts suspect the latter.

And as millions of dollars in bets for the NFL’s opening weekend roll into thousands of Web sites, the pressure on the Internet gaming industry has intensified.

“You don’t need legal expertise to know if you are running an offshore gambling site, don’t come to America right now. You stand a good chance of being arrested,” Internet gambling expert and lawyer Nelson Rose said.

Dicks, 64, was arrested at Kennedy International Airport in New York after flying from London, where his Web sites operate legally and are traded on the London Stock Exchange. More than $1.5 billion shares in the company were suspended by the LSE at Sportingbet’s request Thursday.

Dicks was detained on a Louisiana state warrant from May for gambling by computer, a felony punishable by up to five years year in prison and a $25,000 fine. Similar warrants have been issued for other Sportingbet associates, but authorities would not release information on who or how many of them are wanted.

Eight states have laws prohibiting Internet gambling: Washington, Nevada, Illinois, Indiana, Louisiana, South Dakota, Michigan and Oregon. The arrest of Dicks marked the first time one of those states has taken action against one of thousands of big-time online gambling operations. Millions of American players bet an estimated $6 billion per year online, according to industry figures.

SportingBet owns and operates such poker rooms as paradisepoker and other online ventures including casinos, sportsbooks, and poker rooms.

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