Sportingbet arrest unconnected to wider crackdown on Net gaming

Louisiana state police insisted yesterday that the arrest of Sportingbet's chairman, Peter Dicks, was unconnected to the US Justice Department's action against BetonSports.

Mr Dicks, 64, was granted $50,000 (£27,000) bail in New York while he fights extradition to Louisiana on criminal charges of illegal internet gambling. He was released on bond by New York Supreme Court Justice John Latella yesterday after spending Thursday night in jail in New York.

Sportingbet scrapped all travel plans to the US for its directors after the shock arrest of its chairman, but the online gambling firm carried on taking bets from US punters.

Mr Dicks is the second online gambling director to be arrested as US authorities crack down on the sector. The news wiped millions of pounds off London-listed gaming operators. Sportingbet's finance director, Andy McIver, said: "Until this is resolved I won't be travelling to the US." He added: "The Louisiana laws involved are incredibly wide-ranging. It covers practically any form of doing anything involving any sort of gaming and a computer."

By contrast, David Carruthers, the former chief executive of BetonSports, who was was arrested by the FBI in Dallas in July, was charged under a federal indictment and is being held under the 1961 Wire Act, which explicitly bans telephone sports betting. BetonSports fired Mr Carruthers soon after his arrest and shut down its US operations, which made up the bulk of its business.

Its much bigger rival, Sportingbet, which gets two-thirds of its revenues from the US, carried on as usual yesterday and is considering re-listing its shares next week after suspending them on Thursday. The company stressed the charge was against Mr Dicks by name and that it had not been contacted on the matter.

Mr Dicks, arrested at John F Kennedy International Airport on Wednesday night, appeared before a state court in Queens, New York, the following night. His lawyer, Peter Neiman, argued: "He is really not a flight risk. This is not some mobster who has connections to the crime world."

Mr Dicks has refused to be voluntarily transferred to Louisiana, invoking habeas corpus and pledging to appeal. Louisiana police said they would ask the state governor to issue a warrant for Mr Dicks' extradition, which could come early next week.

Dwight Robinette, senior trooper at the Louisiana state police, said Mr Dicks' arrest was unrelated to the federal case brought against BetonSports. "It is coincidental that the Department of Justice had an arrest two months ago," Mr Robinette said. "Our investigation is in no way, shape or form related."

Louisiana police began investigating Sportingbet in January, and officers set up internet gambling accounts as they tried to amass evidence against the company under the state's laws against gambling by computer. The charges carry a maximum sentence of five years in jail and a $20,000 (£11,000) fine.

Offshore gambling websites threaten the state's finances because it receives duties on bets taken within its borders. The state licenses 12 riverboat casinos and another four land-based casinos. The state attorney-general, a Democrat, Charles Foti, is a former sheriff who has introduced measures to counter gambling addiction.

Louisiana state police said arrest warrants were issued for Mr Dicks and other Sportingbet staff in May, but it was unclear who the others are. Other board members, including the chief executive Nigel Payne, the company founder Mark Blandford and Mr McIver, travelled to the US in July.