Online casino arrests affect gaming shares
Back in July, online casino Bet on Sports executive David Carruthers received the spotlight, after being arrested on charges of racketeering. He spent a month in jail, posted a $1 million bail and since then his ex-colleagues have shut down their American-focused business. Of course, according to the US government, this is just a first step towards cracking down on the whole industry. Stage two has come up with a novelty: an arrest of a high ranked official of yet another online gambling venue. This time it was Peter Dicks, Chairman of online casino Sporting Bet, who was arrested in John F. Kennedy airport and was detained by police.
The two arrests have raised questions about the viability of the fast growing gaming industry, which took in $12 billion last year. Sporting Bet have been acting as if they will continue to move upwards with the rest of the industry but at that time the company’s stock remained suspended. Other shares in the sector like Party Gaming, World Gaming and 888 Holdings all took a sharp hit, and this is during the battle to recover after David Carruthers arrest over a month ago.
Question is, are these arrests signaling a bigger crackdown on the industry than they did when Jay Cohen was arrested in 1998? Back then, he ended up serving time but no major harm was done to the industry. Experts are saying that the situation today allows the online casino industry to continue to make satisfying profits, and the moves pending in Congress aren’t putting much of a dent in the industry’s winnings- yet. With a touch of concern, online casino operators are saying that they have been accustomed to arrests, but it’s been a while since those have happened.