Sportingbet settles with US authorities
Group now well placed to capitalise on the "many opportunities" available in the global online gaming industry, says CEO.
Sportingbet has agreed to pay US$33m (£21m) to US authorities as settlement for activities prior to passage of the US Unlawful Internet Gambling Enforcement Act in October 2006.
The non-prosecution agreement entered into with the Southern District of New York (SDNY), acting on behalf of the US Department of Justice, will see the operator pay US$33m in three instalments, the first of which (US$15m) is due in nine days’ time on 30 September. The second instalment of US$12m is due on or before 30 September 2011, while the third and final settlement fee of US$6m is due on 31 March 2012.
Sportingbet group chief executive Andrew McIver (pictured) said: “This settlement enables Sportingbet to draw a line under events of the past. It is in the best interests of our shareholders and we can now look to the future with increased confidence.”
McIver told eGaming Review the group was pleased with the amount agreed with US authorities, following protracted negotiations lasting the best part of three years. “I think we told the market US$50m, so to get US$33m was an achievement.”
Sportingbet’s lack of a US setttlement has long been seen as preventing it from taking part in any meaningful consolidation activity, on which McIver commented: “[The] resolution of any risk associated with Sportingbet’s former US-facing business, combined with the considerable actions taken by the group over the past three years, ensure that the group is well placed to capitalise on the many opportunities available in the global online gaming industry.”
Sportingbet was linked with takeovers by both Bwin and PartyGaming before the latter pairing entered into a merger agreement in July which would create the largest listed egaming entity in the world.
Finance director Jim Wilkinson added that by removing “a perceived contingent liability from the shares”, the agreement “opens the way to deals of some sort or another.”
But Wilkinson told eGaming Review that no deal was currently in the pipeline: “We haven’t taken any phone calls this morning. In this sector, people talk to each other all the time, I don’t think there is anything imminent. And the normal issues are still there. As Europe regulates there’s a question over a fair part of our revenues and any person taking part in regulation.”
As part of the agreement, Sportingbet has also agreed “to cooperate with SDNY and disclose information to SDNY relating to Sportingbet’s former internet gambling business in the United States”. It has also agreed to “adhere to certain further obligations from the date of the Agreement with respect to its future conduct in the United States.”
Sportingbet had to take drastic action in the aftermath of UIGEA, selling off its prize Sportsbook.com asset to Jazette Enterprises for just US$1 and also divesting itself of third-ranked US room Paradise Poker, writing off around £55m in the process.
Sportingbet is the second European listed operator to enter into a non-prosecution agreement with the US Department of Justice, after PartyGaming reached an agreement in April last year to pay the considerably higher sum of US$105m.