Executive detained on a Louisiana warrant of arrest for online gambling
As we went to press this week more details were starting to emerge on the arrest late on Wednesday night of Sportingbet plc's non-executive chairman, Peter Dicks (64).
The British businessman is in detention following his arrest at Kennedy International Airport on arrival aboard a flight from Britain a spokesman for the U.S.district attorney for Queens, Kevin Ryan told reporters.
He said that Customs officials, performing a routine name check around 11:30 p.m. Wednesday, discovered that Dicks had an outstanding warrant issued by the Louisiana State Police Gaming Enforcement Division. Police officers with the Port Authority, which runs the airport, took Dicks into custody, where he remained Thursday awaiting arraignment in a state court.
The Port Authority confirmed Dicks's detention with spokesperson Pasquale DiFulco saying: "We were acting as the middle man. We were informed that Mr Dicks was wanted on an out-of-state warrant." Dicks was expected to be extradited to Louisiana to face state rather than federal charges.
Ryan said the July 12 warrant charged Dicks, who lives in London, with gambling by computer, which is punishable as a felony by up to a year in prison or a fine of up to $25 000.
Senior Trooper Dwight Robinette Jr., a spokesman for Louisiana State Police said Louisiana authorities intend to bring Dicks back to stand trial in St. Landry Parish, where the warrant for his arrest was signed. Robinette said more arrest warrants have been issued in connection with the case but he declined to provide more information. He said authorities in January launched an investigation into the online gambling industry that involved Sportingbet.
He would not say if other online gambling companies have been targeted by Louisiana authorities.
Shares in the company were suspended by the London Stock Exchange at Sportingbet’s request, but as news of the arrest reached an already nervous online gambling share market in London, related stocks headed south.
Dicks is the second executive of a British Internet sports-betting company to be held in the U.S. (see previous InfoPowa reports) David Carruthers, former chief executive officer of BetOnSports PLC, was arrested in July. The company fired Carruthers, who remains under house arrest in the St. Louis area awaiting trial, and closed its U.S. Web sites.
The founder of Abingdon PLC, a private equity firm, Dicks is also a director at Nasdaq-listed Polar Technology Trust PLC and Standard Microsystems Corp., and has been non-executive director at Sportingbet since 2000. He is also chairman of Daniel Stewart Securities Plc.
Sportingbet plc, which also owns the Paradise Poker brand, has more than 2.5 million customers and an annual turnover of more than $1.2billion (GBP 630 million).
Sportingbet was in the Las Vegas news earlier in the week when a company billboard which featured a transparent box containing $100 000 in one dollar notes was raided and $30 000 taken. Local police have since located much of the loot in an abandoned car.
Discussing The Dicks arrest, Andrew Lee, an online gaming analyst at Dresdner Kleinwort in London, told Bloomberg: "Unless the chairman is being held on charges unrelated to online gaming, we can probably assume the Department of Justice has an agenda against sports-betting companies that are using telephone lines to make bets."
Reacting to the news of the arrest, PartyGaming stock fell as much as 22.5 pence to 94.75 pence in London and was down 6.6 percent despite announcing good results. Bwin Interactive Entertainment AG, an Austrian online bookmaker, slid 12 percent in Vienna, rebounding from a drop of as much as 19 percent.
Leisure & Gaming Plc, which owns betting brands including VIPsports, dropped 31 percent in London. 888 Holdings Plc, the largest online casino operator, slid 14 percent.
Online gambling stocks showed similar volatility when the BetonSports CEO, David Carruthers was arrested in July but prices made a come-back as the market settled down.
As we went to press this week the latest news on detained British businessman Peter Dicks was that he is to remain in detention.
Sportingbet's non-executive chairman appeared before Judge Robert Raciti in a state court in Kew Gardens, Queens, New York, for a hearing last (Thursday) night, fighting an order to extradite him to the state of Louisiana where a warrant for his arrest on undetailed charges has been issued. Additional arrest warrants have been issued in the case and remain sealed, a Louisiana police spokesman revealed, although he would not identify who the targets might be.
Dicks plans to seek bail today (Friday) while his lawyer Peter Neiman fights extradition.
"There are serious legal defences" to the crime alleged, Neiman told the presiding judge, who said he didn't have authority to grant bail to a fugitive. Raciti set a date of September 14 to consider extradition. Neiman suggested bail of $50 000. Raciti, a magistrate, said bail would have to be considered today by a justice of the court.
"This is far from the ordinary case," said Neiman, a former U.S. prosecutor now with the Washington law firm of WilmerHale. "He is not the type of person who would flee. This is not some mobster who has connections to the crime world. This is a highly reputable businessman from the United Kingdom."
Unfortunately for Dicks it appeared that the judge had little discretion in the matter. The judge told Dicks that he did not have the power to grant bail to "a fugitive" and that the businessman, who had been travelling to the States to attend board meetings unrelated to online gambling, would have to remain in custody pending a bail hearing today.
A separate hearing has been set at New York City Criminal Court on September 14 to decide whether Mr Dicks should be extradited to Louisiana. A spokeswoman for the Louisiana state police said earlier that the state would seek to bring Dicks to the state to stand trial. She said other arrest warrants had been issued in connection with the case but did not reveal whether other gaming firms had been targeted.
Nieman said his client will contest extradition to Louisiana and emphasised that he will ask a New York Supreme Court justice on Friday to release his client on bail.
State authorities may find it difficult to pursue charges against Dicks, said attorney Lawrence Walters, a Florida lawyer who advises online casinos and poker rooms. Courts have ruled state law can't be applied to Internet transactions because such activity falls under the pre-empting Commerce Clause of the Constitution, Walters said.
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