Victor Chandler chief executive held in crackdown on gaming

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The Independent Online

The chief executive of bookmaker Victor Chandler has been detained in Israel, the latest victim of a mounting crackdown on internet gaming companies.

Michael Carlton was detained for more than two hours by authorities. The arrest is the latest in a worldwide crackdown against internet gaming sites that has seen executives of gambling companies targeted by authorities in several countries.

Gambling in Israel, like much of Europe, is a monopoly controlled by a state-run gaming board.

However, Victor Chandler set out last year to challenge that and has enjoyed success in the country. In an interview with the Racing Post last year Victor Chandler, who owns the company, said Israel had rapidly become its second-biggest market.

The company launched an aggressive marketing drive in the country, with billboard advertising a common sight in many Israeli cities. It also runs a Hebrew website in an attempt to draw in punters.

Mr Carlton has compared the 92 per cent that the company returns to gamblers unfavourably with the returns offered by the Israeli monopoly.

But the company's stance has not gone down well with authorities who have become increasingly unhappy about the activities of online gaming companies in Israel.

Last month, Major General Yohanan Danio, head of the police investigations and intelligence unit, notified Interlogic, which operates the Play 65 internet site, that the country's attorney general and police took the view that the operation of a backgammon site offering real money gambling was a criminal offence.

Becoming involved in an online betting company has become an increasingly risky occupation. The most high-profile case involves David Carruthers, the former chief executive of BetonSports who was arrested in Fort Worth, Texas, on a series of charges including fraud and racketeering relating to the business's operation. He is now, in effect, under house arrest.

The former chairman of Sportingbet Peter Dicks was arrested in New York on a warrant filed in Louisiana but was released and allowed to fly home to London.

France, where - as in Israel - gambling is provided by a state monopoly, also arrested two executives of an Austrian online gaming company, Bwin, whose operations were ruled unlawful by German authorities.

Last year Victor Chandler hired investment bankers to help with a series of "unsolicited offers".

The company hired corporate finance boutique Zeus Capital to evaluate the approaches and advise on how to proceed. Analysts have estimated the business is worth up to £300m. It was seen as an attractive target because the company never took bets from the US, where a law banning banks from dealing with gambling websites was passed last year.

The bookie does, however, have a significant business in Asia. Victor Chandler led the dash for Gibraltar by UK bookies which resulted in the abolition of betting duty. It has a reputation of being prepared to take huge bets from high-rolling gamblers.