McIver risks invoking Department of Justice's wrath
At a time when most executives in the online gambling industry are running scared from the long arm of the US's Department of Justice, Sportingbet's new chief executive Andrew McIver seems quite content to invoke their wrath.
In an interview with the Financial Times, published on its front page on September 21, McIver made it clear that the company would continue to target the US betting market;
"It's the US or what's the point.....if you take the US away they (other online gambling companies) will be a shadow of their former selves."
Depending on where one is standing, McIver's words look either very brave or very foolish. Prior to the arrest of Dicks, Sportingbet had fallen under the radar of the US authorities on at least one occassion; moreover, it is known that the company has in the past accepted telephone bets from US citizens, in clear contravention of the Wire Act.
In October 2001 New Jersey Attorney General John J. Farmer, Jr. announced that divisions of Gaming Enforcement and Consumer Affairs had filed civil actions against 2betdsi.com, Intercasino.com, Laythepoints.com, Sportingbet.com, Sportsbook.com, Intertops.com, BetonSports.com, Betmill.com</B> amongst others for acting in violation of New Jersey law by accepting wagers from individuals, including minors, located in New Jersey. The suit alleged that the defendants operated illegal sports book sites where New Jersey residents, via the Internet or telephone, can place wagers on professional and college sporting events. It is believed that the suit failed because of problems serving it on the named companies.
The Guardian recently ran a number of articles in which it probed the extent to which Sportingbet had offered and did still offer telephone betting services to US customers. Noting that six years ago telephone operations accounted for one in three wagers placed with the company, the paper quoted McIver as saying;
"I think it [phone betting] was substantial in relation to Sportingbet at the time, but I don't think it would be today ... telephone betting was ... certainly not a significant part of the business when I joined in December 2001."
A Sportingbet spokesperson, seemingly referring to the present (July 2006) said:
"We are an online operator with 99% of our wagers in the US taken via the internet. However, there is a telephone service available to a select number of customers should they experience problems with the internet when trying to place a bet."
In the wake of Peter Dicks' arrest, The Times of London reported that Louisiana had a total of more than 50 warrants outstanding against executives from internet gambling companies that have clients who live within the states boundaries;
"It is believed that those targeted by the warrants include other Sportingbet directors, including Nigel Payne, the chief executive, and board members of companies including PartyGaming and 888 Holdings."
Also in the wake of Dicks' arrest, a spokesperson for the Department of Justice repeated that it would continue to employ three statutory tools in its battle against online gambling; "We bellieve, and have always believed that online gambling contravenes three statutes, the Wire Act, the Travel Act and the Illegal Gambling Businesses Act."
The Prohibition of Illegal Gambling Businesses Act 1955 states that;
(a) Whoever conducts, finances, manages, supervises, directs, or owns all or part of an illegal gambling business shall be fined under this title or imprisoned not more than five years, or both.
A look at the main institutional investors in Sportingbet, throws up the likes of Fidelity, Blue Ridge Capital, Morgan Stanley, Prudential and Merrill Lynch, all US firms.
Institutional Investors in Sportingbet
At a time when most executives in the online gambling industry are running scared from the long arm of the US's Department of Justice, Sportingbet's new chief executive Andrew McIver seems quite content to invoke their wrath.
In an interview with the Financial Times, published on its front page on September 21, McIver made it clear that the company would continue to target the US betting market;
"It's the US or what's the point.....if you take the US away they (other online gambling companies) will be a shadow of their former selves."
Depending on where one is standing, McIver's words look either very brave or very foolish. Prior to the arrest of Dicks, Sportingbet had fallen under the radar of the US authorities on at least one occassion; moreover, it is known that the company has in the past accepted telephone bets from US citizens, in clear contravention of the Wire Act.
In October 2001 New Jersey Attorney General John J. Farmer, Jr. announced that divisions of Gaming Enforcement and Consumer Affairs had filed civil actions against 2betdsi.com, Intercasino.com, Laythepoints.com, Sportingbet.com, Sportsbook.com, Intertops.com, BetonSports.com, Betmill.com</B> amongst others for acting in violation of New Jersey law by accepting wagers from individuals, including minors, located in New Jersey. The suit alleged that the defendants operated illegal sports book sites where New Jersey residents, via the Internet or telephone, can place wagers on professional and college sporting events. It is believed that the suit failed because of problems serving it on the named companies.
The Guardian recently ran a number of articles in which it probed the extent to which Sportingbet had offered and did still offer telephone betting services to US customers. Noting that six years ago telephone operations accounted for one in three wagers placed with the company, the paper quoted McIver as saying;
"I think it [phone betting] was substantial in relation to Sportingbet at the time, but I don't think it would be today ... telephone betting was ... certainly not a significant part of the business when I joined in December 2001."
A Sportingbet spokesperson, seemingly referring to the present (July 2006) said:
"We are an online operator with 99% of our wagers in the US taken via the internet. However, there is a telephone service available to a select number of customers should they experience problems with the internet when trying to place a bet."
In the wake of Peter Dicks' arrest, The Times of London reported that Louisiana had a total of more than 50 warrants outstanding against executives from internet gambling companies that have clients who live within the states boundaries;
"It is believed that those targeted by the warrants include other Sportingbet directors, including Nigel Payne, the chief executive, and board members of companies including PartyGaming and 888 Holdings."
Also in the wake of Dicks' arrest, a spokesperson for the Department of Justice repeated that it would continue to employ three statutory tools in its battle against online gambling; "We bellieve, and have always believed that online gambling contravenes three statutes, the Wire Act, the Travel Act and the Illegal Gambling Businesses Act."
The Prohibition of Illegal Gambling Businesses Act 1955 states that;
(a) Whoever conducts, finances, manages, supervises, directs, or owns all or part of an illegal gambling business shall be fined under this title or imprisoned not more than five years, or both.
A look at the main institutional investors in Sportingbet, throws up the likes of Fidelity, Blue Ridge Capital, Morgan Stanley, Prudential and Merrill Lynch, all US firms.
Institutional Investors in Sportingbet
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We asked a source, who has in the past had dealings with the Department of Justice, what the chances were that it would now move to employ the The Prohibition of Illegal Gambling Businesses Act 1955 against US based companies that invested in online gambling companies that took bets from US citizens;
"There was a tendancy in the past to see the Department's anti-online gambling campaign as being opportunistic; they did not really have the resources; they had better things to concentrate on such as drugs and terrorism. However, one only has to look at the recent arrest of Carruthers and the dismantling of Betonsports, alongside the comments of Hanaway (Missouri's US attorney Catherine Hanaway) to the effect that offshore betting by online punters could be used to fund terrorist attacks on America, to realise that the dynamic has changed. Those now leading the crusade against online gambling from within the Department equate it with terrorism and child pornography. They will probably pull out all the stops to put an end to it." The institutions themselves, seem content to gamble that the threat is not real. On Monday 18 Sep Sportingbet announced that fund managers from Credit Suisse now have a notifiable interest in 33,014,548 ordinary shares of 0.1 pence of the Company, amounting to 7.83% of the issued share capital.
<TABLE cellSpacing=1 cellPadding=1 width=400 bgColor=#cccccc border=1 halign="centre"><TBODY><TR><TR><TD>Institution <TD>% Holding <TD><TR><TD>Fidelity <TD>23.269 <TR><TD>DBS Advisors <TD>19.375 <TR><TD>Bonaire Investment <TD>9.414 <TR><TD>Credit Suisse <TD>7.160 <TR><TD>Deutsche Bank <TD>7.165 <TR><TD>Prudential <TD>5.666 <TR><TD>Merill Lynch <TD>6.382 <TR><TD>McKinley Cap MGT <TD>3.760 <TR><TD>Morgan Stanley <TD>3.048 <TR><TD>Blue Ridge Offshore <TD>2.638 <TR><TD>New Star Asset <TD>2.026 <TR><TD>Mark Blandford <TD>1.775 <TR><TD>Investec Bank <TD>1.540 <TR><TD>Dit Deutscher <TD>0.953 </TD></TR></TBODY></TABLE>
</TD></TR></TBODY></TABLE>Source: Industry Sources We asked a source, who has in the past had dealings with the Department of Justice, what the chances were that it would now move to employ the The Prohibition of Illegal Gambling Businesses Act 1955 against US based companies that invested in online gambling companies that took bets from US citizens;
"There was a tendancy in the past to see the Department's anti-online gambling campaign as being opportunistic; they did not really have the resources; they had better things to concentrate on such as drugs and terrorism. However, one only has to look at the recent arrest of Carruthers and the dismantling of Betonsports, alongside the comments of Hanaway (Missouri's US attorney Catherine Hanaway) to the effect that offshore betting by online punters could be used to fund terrorist attacks on America, to realise that the dynamic has changed. Those now leading the crusade against online gambling from within the Department equate it with terrorism and child pornography. They will probably pull out all the stops to put an end to it." The institutions themselves, seem content to gamble that the threat is not real. On Monday 18 Sep Sportingbet announced that fund managers from Credit Suisse now have a notifiable interest in 33,014,548 ordinary shares of 0.1 pence of the Company, amounting to 7.83% of the issued share capital.
