Sportingbet, the online gambling operator, has paid $400,000 (£205,000) to the State of Louisiana to draw a line under the arrest in America last year of its former chairman on gaming charges.

Under the terms of the settlement, Louisiana State Police have cancelled the warrant against Peter Dicks, who was arrested in September in New York, as well as sealed warrants against other Sportingbet directors. They are believed to include Nigel Payne, the former chief executive, and Andy McIver, his successor.

In a statement, the company said that it had “reached an amicable resolution” with the St Landry Parish District Attorney. It said that “all related warrants” issued by the state police had been cancelled, adding: “Both Sportingbet and the St Landry District Attorney now consider the matter closed.”

Mr Dicks, who subsequently resigned from the board, was arrested on the Louisiana warrant after flying into John F Kennedy airport in New York. However, he was released later after New York refused to extradite him to Louisiana on the ground that he was not physically present in Louisiana when the alleged offence took place.

Earl Taylor, the St Landry Parish District Attorney, said that he had decided to seek a financial settlement after realising that it was unlikely that he would be able to prosecute the case. “We were at the point where we couldn’t get them here,” he said.

The dismissal of the charges is unlikely to persuade Sportingbet to relax its ban on directors visiting America, as it is believed that there is still a threat of arrest.

In the wake of Mr Dicks’s arrest, all internet gambling transactions were banned by Washington and Sportingbet was among the operators to close its US-facing business.

The US ban has sparked a wave of consolidation and this month Sportingbet said that it had received an approach from Bwin Interactive Entertainment, an Austrian rival.

In a separate settlement, Neteller, the processor of internet gambling payments, said that it had agreed a timetable with the US Attorney’s Office for the Southern District of New York for the return of funds to its American customers within 75 days.

Stephen Lawrence and John Lefebvre, Neteller’s founders, were arrested by American officials in January and charged with conspiracy in connection with multibillion-dollar money-laundering linked to internet gambling. The European Commission has demanded that Denmark, Finland and Hungary should change their laws preventing sports betting groups from other European Union countries from securing licences.

US justice deals mixed hands

July 2006 David Carruthers, chief executive of BetOnSports, arrested in Dallas. Still under house arrest in St Louis, Missouri, awaiting trial

September 2006 Peter Dicks, chairman of Sportingbet, detained at JFK airport on a Louisiana warrant. Later released without charge

October 2006: President Bush signs the Unlawful Internet Gambling Enforcement Act, banning online gambling transactions

January 2007: Neteller’s founders Stephen Lawrence and John Lefebvre arrested in, respectively, the US Virgin Islands and California. Both men are free on bail

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