Internet gambling firm sells US business

Online gambling firm Sportingbet has announced it has sold its US operations after Congress passed a law banning internet cash gaming.

In a statement Sportingbet said it undertook a "comprehensive legal and strategic review" of its US operations following the passing of the Unlawful Internet Gambling Enforcement Act 2006 by US Congress on September 29.

The British-based company says it has sold its US sports betting and casino business to Jazette Enterprises Limited for a nominal fee of one dollar (53p), with the buyer taking on liabilities of 13.2 million dollars (£7.1 million).

The decision comes as President George W Bush plans to sign the act today.

The statement said: "Having considered the legal advice received and the options available, the board concluded that a disposal of the group's US-facing sports betting and casino operations together with the closure of its US poker operations was in the best interest of all stakeholders."

Sportingbet's share price has been in freefall since US authorities arrested its then chairman Peter Dicks in a crackdown on online gambling.

The US operations employed more than 500 people.

The deal is subject to a condition precedent that the new legislation is signed by the President of the United States and becomes law before the closing of the 109th Congressional Session.

If it does not become law the US operations will revert back to Sportingbet.

The group will continue to market its Paradise Poker brand in Canada, Europe and other relevant markets.

Andrew McIver, Chief Executive designate, said: "We are saddened to have to dispose of such a fantastic business as a result of political actions in the US Congress.

"The sale however, prevents significant closure costs which would have been both expensive and time consuming.

"It also preserves the employment of those of our colleagues who have worked so hard to build the US operations into the highly profitable business it is today.

"Sportingbet will now focus on developing its business in other key markets of the world."