Arrest sends shockwaves throughout online casinos
On Wednesday, Peter Dicks, chairman of London-based SportingBet PLC, was arrested upon arriving on an overseas flight at New York’s JFK International Airport. He was held on a criminal warrant issued by the state of Louisiana. It was the second arrest of a foreign online casino executive in the U.S. in two months. The multi-billion dollar online casino industry fears the financial consequences of the legal battle waged against it.
Immediately after the arrest, the online casino asked the London Stock Exchange, where its stock is listed, to halt trading in its shares. Indeed, shares in other online casino companies plunged. The online gambling market is estimated at more than $11 billion annually and is projected to reach $25 billion by 2010. More than half of that is estimated to come from gamblers in the US. Sportingbet made $2.86 billion in revenue in the year that ended July 31, 2005, about two-thirds of which came from the US.
Accordingly, the legal battle, and the arrests’ effects have implications that value in the billions of dollars. Many online casino companies have taken steps to close their sites to users in the U.S. and have refocused their strategies on Europe and Asia. PartyGaming Plc, for example, a Gibraltar-based online casino that is about to branch into sports betting, announced on the day of the arrest that the U.S. share of its $662 million in revenue in the first six months of the year had fallen compared to the year earlier, from 86% to 77%.