After the warning of David Carruthers, the former BetonSports chief executive now under house arrest in Texas for alleged infringement of US gaming laws, the working assumption, not to mention the legal advice, was that online gaming bosses who value their liberty should stay at home and steer clear of the US. The fearless Peter Dicks, chairman of Sportingbet, chose to ignore that warning, believing wrongly that a non-executive chairman pursuing unrelated business would be safe. He's already paying the price.
His arrest will only heighten a growing sense of paranoia in the City and business about the dangers of doing business in the US. Yet the fact of the matter is that online and telephone betting on sports events is unambiguously illegal in the US, and it was ill advised to think otherwise. An eventual crackdown was always highly likely.
This might seem silly to us, especially from a land that has brought us the vulgarity and misery of industrial-scale gambling, Las Vegas-style. Yet the historical reasons for it seem sound enough - the widescale fixing of sports events by organised crime for gaming purposes in the 1950s and 1960s.
If something is banned, then it is wrong to attempt to make a business out of it. To argue otherwise, as all these companies do, is as ridiculous as claiming the Medellin Drugs Cartel should be legitimised as a business because it satisfies a clear demand in the US in an efficient manner. In any case, Mr Dicks' arrest is further evidence that any climate of toleration is fast giving way to one of enforced prohibition.
Online gaming sites such as PartyGaming, as opposed to sports betting sites, insist they are not covered by the Wire Act provisions used against the likes of Mssrs Dicks and Carruthers.
Wisely, however, few others are taking any risks. None of PartyGaming's executives plan to travel to the US any time soon, this despite the fact that the vast bulk of their revenues come from there. No wonder PartyGaming's chief executive, Mitchell Garber, was so keen to emphasis his plans for expansion elsewhere in the world in his interims yesterday. Even for him, the days of American plenty could be coming to an end.
Fink takes a back seat at Man Group
Stanley Fink is the man who has everything - wonderful wife, wonderful children, a fascinating job, outstanding success in the City, and self-made wealth beyond the dreams of avarice. Yet he has been forced to find out the hard way that none of it means anything if you don't have your health.
About to board a plane after a holiday in South Africa two years ago, he suddenly became aware that he had lost the power of speech. Subsequent investigation uncovered everyone's worst nightmare - a tumour on the brain; Mr Fink, chief executive of the hugely successful hedge fund operator, Man Group, was just 46 and staring untimely and harrowing death in the face.
As it turned out, the tumour was benign and the operation to remove it a miraculous success. Within two months he was back at his desk, albeit with his speech, which he had had to relearn, slightly impaired and his previously Herculean levels of stamina flat on their back. To the relief of family and friends, Mr Fink is now fully recovered and back in rude health. Yet few go through an experience like that without it being life-changing.
Nobody should doubt Mr Fink's commitment to what he does or his company. He's been with Man virtually all his working life, the past six years of it as chief executive, during which he has transformed the company from its routes in commodity trading into Europe's largest quoted hedge fund manager with funds of $54bn. He's more than earned his right to step back from the pressures of the chief executive's suite. It's got nothing to do with health; but it may have something to do with those dark days when Mr Fink wondered whether he would be returning to work at all, let alone the demands of running a FTSE 100 company.
Instead, he intends to concentrate on his philanthropy, where he has already been active in raising funds for the Evelina children's hospital at Guy's and is heavily involved in ARK, the industry-wide hedge-fund charity. Hedge-fund managers have a particular propensity for charity, with quite a few giving away large chunks of the wealth they generate to good causes. George Soros, the father of the industry, is proud to call himself a speculator, yet for many the term still carries connotations of parasitic behaviour and unearned wealth.
Call it guilt if you like, but the speed and ease with which successful hedge funds make money creates both the means and the will to put something back. In this regard, Mr Fink conforms with the pattern. The hedge-fund industry's loss will be the charity world's gain. Investors can at least comfort themselves with the knowledge that he's not leaving entirely. He remains as non-executive chairman of the group and chairman of the strategic investment committee.
Yell triumphs over competition regulators
Collapse of stout party. Almost from the moment they started investigating the matter, competition regulators have been steadily rowing back on the idea that Yell's directories business continue to be price-controlled after the present arrangements expire in April 2008.
Yesterday seemed to mark the final surrender to common sense when the Competition Commission said that increased competition from rivals and the internet meant that Yell would in future be allowed to raise prices in line with inflation, which in practice means no price regulation at all.
This column said at the time of the referral that the inquiry was a complete waste of time, and so it has proved. Yell's prices were already declining by more than the previous price cap of RPI minus 6 even before the probe was launched. Yet rather than pose the reasonable question of whether price regulation was any longer necessary, the commission started instead from the more aggressive standpoint of what should replace the present regime and whether the situation had become so serious as to warrant a break-up.
Growing competition to Yellow Pages is one thing. There is in any case plenty of evidence to suggest that price regulation was itself acting as a barrier to competition, by artificially setting prices at a level where only organisations of scale could survive. Still, better the sinner that repenteth...
Carphone's Dunstone gets an FSA beating
My, my. Another black mark for the Prime Minister's favourite entrepreneur, Charles Dunstone. The Carphone Warehouse founder is the guy who always comes up smelling of roses whatever he does. Yet recently there have been blemishes. He's been rapped by the Advertising Standards Authority for making overblown claims for his broadband initiative, while the company's lack of preparedness meant the initiative itself descended into chaos. Now he's been fined £245,000 by the FSA for failing to send out policy documents concerning mobile phone insurance.
Just a run of bad luck, or is Mr Dunstone losing his touch? Whatever the answer, it is hard to disagree with his description of the FSA fine as "disproportionate". That Carphone is in the wrong is not in doubt, but this is a company that volunteered to have its insurance sales regulated, when it didn't have to, and it seems that no customer was disadvantaged by its omissions. Aren't there better things for the FSA's enforcement division to be doing?
Mr Dunstone has decided to pay up and move on, which is probably wise, but there is surely something innately unjust in a system which encourages organisations to take their punishment whether they agree with it or not because they have been told that if they appeal and lose they will be treated a good deal more harshly.Reuse content