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Best of Bradley Vallerius

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Gaming world watches as Dicks legal saga continues

26 September 2006

Peter Dicks, non-executive chairman of British online gambling corporation Sportingbet is slated to return to New York for a second extradition hearing on Thursday. Dicks' arrest earlier this month flung the online sportsbook industry into panic and prompted the resignation of two World Gaming directors Monday.

The directors leaving World Gaming, ex-chairman James Grossman and Clare Roberts, are both attorneys with business in the U.S. Most online gambling companies have advised their executives and directors that they should not travel to the United States because they risk prosecution.

Dicks' saga began Sept. 6 when he was arrested at New York's John F. Kennedy International Airport at the request of Louisiana authorities. On Sept. 14 New York Governor George Pataki's office refused to honor a request to have Dicks extradited to the state of Louisiana where he faces charges of illegal gambling by computer.

"We had an emergency hearing the night before court was to be had, and we argued before the governor's counsel that Peter Dicks had committed no crime in Louisiana," said Dicks' attorney Barry Slotnick. "The governor's counsel heard us, and at 3 o'clock in the morning we were notified that the governor had withdrawn the extradition warrant.

"Mr. Dicks then appeared in court the next day, we moved to have his bail withdrawn and allow him to go back to merry old England, and that's where he is right now. He'll be back on the 28th to face any charges."

Dicks' arrest came two months after an executive from a separate British online gambling corporation, BetonSports, was arrested upon entering the airport in Dallas. While Dicks' detainment came as a result of a warrant filed by Louisiana, the order to arrest BetonSports' CEO David Carruthers was the result of a federal indictment.

The Justice Department had been the only law enforcement office proactively battling online gambling in the last ten years. The DOJ maintains that offshore online gambling sites are illegal, but Congress has never passed legislation specifically designed to control gambling over the Internet.

Louisiana passed legislation explicitly forbidding online gambling in 1997, but until the Dicks arrest no criminal suit had ever come from it.

Historically, nearly all extradition requests from one U.S. state to another are honored, but this case is complicated by the fact that laws governing the Internet vary from state to state and country to country. Dicks hasn't even set foot in Louisiana for more than 20 years.

"A request to extradite requires that it meet certain legal standards," stated a spokesperson for Governor Pataki's office. "My understanding is that because cybersecurity and cybercrimes is such a new thing, our governor needs to be certain that it meets legal standards."

The governor's office says it is continuing to work with the state of Louisiana to resolve the issue.

Should the extradition request be honored, Dicks would be sent to Louisiana where he would likely enter a not-guilty plea and undergo a series of pre-trial motions before reaching a settlement.

"Louisiana is an infamous state for deal-making," says Emery Ledger, an attorney specializing in Internet gambling. "I anticipate a settlement, and there's some speculation going around that that's what this was all about anyhow."

Slotnick remains confident that his client will not have to defend against charges in Louisiana. "I expect that if the governor reinstitutes the warrant, we'll have legal arguments before a judge and we'll have a hearing, and at the end of the day Mr. Dicks will be going back to London, not to Louisiana."

Casino City made several attempts to speak with Louisiana state officials, but no requests were honored.

In the aftermath of his arrest, Dicks has resigned from Sportingbet, but the company continues to offer online gambling to American customers through a host of websites, including Sportsbook.com, PlayersOnly.com, Sports.com, Aces.com and ParadisePoker.com. The company's shares have resumed trading on the London Stock Exchange after a two-day halt following his arrest.

"It has been business as usual for the Sportingbet Group across all of its businesses and territories, including the U.S, since Peter Dicks' arrest in the U.S.," said Sportingbet spokesman George Hudson. "There has been no change to operational activity at all."

Sportingbet's shares may have dropped in value after the incident, but its performance has suffered no noticeable lag. "Sportingbet hasn't seen clients withdrawing funds, it hasn't seen a spike in customer numbers post-Betonsports, and it hasn't seen any material change in the dynamics or profile of the business in the U.S. at all," said Hudson.

"You've got to remember, Sportsbook.com and ParadisePoker.com are well-known brands. A lot of the customers who play on our sites in the U.S. don't even know Sportingbet UK Plc based in London. They know the brand, they get good odds, good customer service, and they get their money back.

"So sure, it's making front page business news over in the UK and the op-eds in the New York Times and Washington Post, but for the average Joe who is just a recreational gambler who puts some bets on the Dolphins or 49ers, it's not major news for them, so it hasn't really registered."

Congress joins the act

Congressional efforts to make online gambling illegal have had mixed results.

Roll Call is reporting that Senate Majority leader Bill Frist (R-Tenn.) has attempted to attach an anti-online gambling measure to a Defense Department authorization bill..

But a lobbyist familiar with the proceedings says Frist was not successful. "Internet gambling is not in (the) Department of Defense (bill)," he said. "And Department of Defense authorization is… well I wouldn't say on life support, but it's looking less and less likely that it gets done before the election."

The House passed a bill in July that would prohibit Internet gambling.

Gaming world watches as Dicks legal saga continues is republished from Online.CasinoCity.com.
Bradley Vallerius

Bradley P. Vallerius, JD manages For the Bettor Good, a comprehensive resource for information related to Internet gaming policy in the U.S. federal and state governments. For the Bettor Good provides official government documents, jurisdiction updates, policy analysis, and many other helpful research materials.

Bradley has been researching and writing about the business and law of internet gaming since 2003. His work has covered all aspects of the industry, including technology, finance, advertising, taxation, poker, betting exchanges, and laws and regulations around the world.

Bradley Vallerius Websites:

www.FortheBettorGood.com
Bradley Vallerius
Bradley P. Vallerius, JD manages For the Bettor Good, a comprehensive resource for information related to Internet gaming policy in the U.S. federal and state governments. For the Bettor Good provides official government documents, jurisdiction updates, policy analysis, and many other helpful research materials.

Bradley has been researching and writing about the business and law of internet gaming since 2003. His work has covered all aspects of the industry, including technology, finance, advertising, taxation, poker, betting exchanges, and laws and regulations around the world.

Bradley Vallerius Websites:

www.FortheBettorGood.com