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Welcome to the News desk. |
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Betfair flotation may give potential shareholders a sinking
feeling |
14/09/2010 |
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Andrew Clark |
London-based
company accepted it used payment methods to hide the fact it was dealing with
US gamblers
The gambling
company Sportingbet is to pay $33m (£21m) to settle a long-running
dispute with US prosecutors over its alleged flouting of America's ban on
internet gaming which briefly led to the imprisonment of its chairman in 2006
during a visit to New York.
Sportingbet last night agreed to forfeit the money in return for a
non-prosecution deal with the US attorney's office in Manhattan. The
London-based company accepted that it used payment processing methods intended
to hide the fact that it was dealing with US clients, and that it took steps to
mask winnings paid out to gamblers in the US.
The settlement is the
latest of several struck by British companies which have fallen foul of
America's tight restrictions that prohibit most types of online sports gambling
and ban games such as poker on the internet. In April last year, rival
Partygaming struck a $105m non-prosecution deal over similar charges.
Sportingbet is set to announce the
payment to the London Stock Exchange on Tuesday morning. A company spokesman
said: "The settlement is in the best interests of the company and of all
shareholders. It brings clarity. Sportingbet has drawn a line in the sand and
can look to the future with renewed confidence."
Lawmakers in the US
argue that internet gambling allows money to flow out of the country in an
unregulated way and that it is an inappropriate circumvention of gaming
licensing. During a sudden crackdown by the US authorities four years ago,
Sportingbet's then chairman, Peter Dicks, was arrested during a business trip
at New York's JFK airport and was briefly held at the city's Rikers Island
prison complex before being allowed to return to Britain.
Several other
British executives have been arrested including David Carruthers, former boss
of the gaming firm Betonsports, who was sentenced in January to 33 months in
prison for organising an illegal gambling racket.
In a statement last
night, US prosecutors said Sportingbet had agreed to co-operate with an ongoing
investigation into illegal online gambling and would maintain "a permanent
restriction on providing internet gambling services to US customers".
Sportingbet sold its US operation at the end of 2006 for a nominal sum, taking
a £252m accounting write-down.
Keen for tax revenue to tackle a
soaring budget deficit, Democrats in Congress have been pushing for a repeal on
the internet gambling ban. The House financial services committee backed
liberalisation of online gambling in July, although such a measure would be
difficult to enact without co-operation from reluctant Republicans.
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