BetonSports takes $20m hit selling Hooball back to its owners

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The Independent Online

BetonSports has been forced to sell its Asian Hooball and 777ball gaming businesses back to their previous owners for $2.25m (£1.2m) cash.

The troubled internet gaming group paid an initial $22m to a group of Asian private investors in May for Hooball and 777ball, doubling its presence in Asia.

But it sold back the Asian businesses yesterday as it was unable to fully integrate it or complete payments after having been forced this summer to close its US business, which contributed 95 per cent of profits.

The group said it was reviewing the options for its remaining Asian unit Easy Bets.

The buyers will return BetonSports 3.9 million shares they received in the original deal, and a second payment of $5m that BetonSports was due to make will be cancelled.

"The company's inability to pay the outstanding consideration when it fell due, or to fully integrate the business, as well as damage to the business caused by the legal action of the [US] Department of Justice... have driven the pricing of this sale," BetonSports said in a statement.

The group pulled out of the United States in July after its former chief executive David Carruthers was arrested while changing flights in Texas and charged with racketeering and other charges. Mr Carruthers' arrest heralded the clampdown on internet gaming operations across the US, and the meltdown in gaming shares exposed to the US market on the London Stock Exchange.

Mr Carruthers is in effect under house arrest in St Louis, Missouri, awaiting trial after being released on $1m bail. He was fired by BetonSports in July shortly after his arrest. Mr Carruthers and other defendants, including the company's founder Gary Kaplan, have pleaded not guilty to the charges against them.