In a recent article from the Reuters news service, it was revealed that an agreement between Sportingbet and the United States Department of Justice is expected sometime in 2009. The agreement may absolve Sportingbet of any wrongdoing that occurred prior to the passage of the Unlawful Internet Gambling Enforcement Act (UIGEA) in 2006.
Sportingbet is a publicly traded company on the London Stock Exchange, where it can be found under the symbol “SBT.” It is the parent company of popular online poker site Paradise Poker, which makes its home on the growing Boss Media Network. The company’s Chief Executive Officer, Andy McIver, gave his estimation of a settlement timeline to Reuters: “We will hopefully reach agreement in the current calendar year; it’s not going to be [resolved in] weeks. The talks have been very amicable and very positive, but incredibly slow.” Sportingbet has recently entered the South African market, and, according to its most recent earnings release, is “the only legal gaming product available in this market.”
A Sportingbet employee detained while on vacation and accused of offering online gambling to residents of Turkey was released of travel restrictions in January, allowing him to make his way back to the United Kingdom. He was one of nine people arrested and a hearing is not expected to 2010. Sportingbet commented to the London Stock Exchange, “The Group continues to have no assets, operations, or employees based in Turkey.” The individual in question was brought into custody last May.
If successful, Sportingbet may clear itself of any wrongdoing in the eyes of the U.S. Department of Justice for taking bets from U.S. residents prior to the end of 2006. Paradise Poker, like PartyPoker and Pacific Poker, departed the market soon after the passage of the UIGEA. The three online poker rooms are all owned by publicly traded companies on the London Stock Exchange (Paradise Poker by Sportingbet, PartyPoker by Party Gaming, and Pacific Poker by 888). Each exited the market in deference to shareholder interests.
In December, Party Gaming co-founder Anurag Dikshit admitted to violating the Wire Act of 1961 in a court room in the United States. He agreed to pay a sum of $300 million to the U.S. Government and may face up to two years in jail; sentencing is not officially scheduled until December of 2010. According to reports, Dikshit remains a 27% stakeholder of Party Gaming and is its larger single owner. The husband and wife team of Ruth Parasol and Russ DeLeon own 17% each; neither has struck an agreement with the U.S. Department of Justice.
Despite its statement to Reuters that a settlement with the U.S. Government may occur in 2009, its official earnings statement is much vaguer: “The Board continues its discussions with the U.S. Department of Justice with regard to a possible resolution of the historical risk associated with the Group’s former U.S. business. These discussions remain positive and amicable, though no further clarity has been provided as to the likely outcome or its timing.”
Its online poker room will soon receive a major boost in players as InterPoker, one of the last sites left standing on the CryptoLogic Network, will move to the Boss Network on March 17th. The network switch finalizes the migration of CryptoLogic sites to Boss after the former announced in November that it would cease poker operations and instead focus on developing top-tier casino software. CrytpoLogic is traded on the NASDAQ Stock Exchange in the United States under the symbol “CRYP.”
Sportingbet posted an operating profit of £10.1 million during the second quarter, which ended on January 31st, 2009, marking a 35% increase year over year. Net gaming revenue for the company was £43.6 million during the recently completed quarter.
