Sportingbet withdrawal from US to cost £210m

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The Independent Online

Sportingbet is to take a £210m hit after its forced retreat from the United States in the wake of the country's clampdown on internet gambling.

The online gaming company lost 80 per cent of its business when it sold to private investors for $1 on Friday last week, just hours before a new ban on internet gambling was signed into law by President George Bush.

The company also closed its Paradise Poker website to American customers. That means it has lost 56 per cent of its customers, including the most active punters - Americans bet more often and stake bigger amounts than Europeans.

Pre-tax profits jumped 75 per cent to £71.5m in the year to the end of July.

Andrew McIver, the new chief executive, said: "They are a great set of results, but sadly we had to close 80 per cent of our business.

"We are very saddened by the events particularly as it was driven by one man's [Senator Bill Frist's] blind political ambition."

The exit from America, the world's most lucrative internet gaming market, has set the company back by five years. But he added: "We will pick ourselves up and grow again. We know a lot more than we did five years ago and the software is a lot better."

The former finance director recently stepped up to the top job to replace Nigel Payne. Last month Sportingbet's then chairman, Peter Dicks, was arrested in New York on charges arising in the state of Louisiana of gambling by computer, but he has since been released.

Mr McIver said the board still had a no-fly policy to the US, which it would review periodically.

Louisiana state police have issued arrest warrants for at least two other Sportingbet directors.

The company said the US closures would cost it £200m for the write-off of goodwill and another £10m for restructuring.

Mr McIver said the company would now focus on building its businesses in Europe and Australia as well as expanding into new areas such as Asia and Latin America.

He said the group had £35m of cash, adding that he would not "rush down the acquisition route".