PRESIDENT BUSH sounded the death knell of America’s $6 billion (£3.2 billion) internet gambling industry yesterday when he formally signed legislation banning all transactions involving US punters.

The passing of the Unlawful Internet Gambling Enforcement Act as an adjunct to the Safe Port Act sparked a stream of announcements by London-listed operators confirming the sale or closure of their US- facing operations, while World Gaming collapsed into administration.

Sportingbet and Leisure & Gaming both announced the sale of their US-facing operations for nominal sums, while Excapsa Software confirmed the disposal of all its operating assets for $130 million (£70 million) and its intention to return the cash to investors and cancel its AIM quote.

Sportingbet, which derives almost two thirds of its business from America, announced the sale of Sportsbook.com, its US-facing sports betting and casino business, to Jazette Enterprises, a new offshore vehicle set up with Sportsbook management.

To avoid any accusation that it is profiting from an illegal business, Sportingbet has sold out for just $1, although it has also offloaded £13.2 million of liabilities and saved on redundancy and closure costs of about $14 million. It has closed its Paradise Poker business to US residents.

Andy McIver, the chief executive-designate, said that he was “saddened to have to dispose of such a fantastic business”, but was confident that Sportingbet could rebuild its position by developing its European and Australian sports and casino businesses and the non-US business of Paradise Poker.

PartyGaming, the world’s biggest internet gambling operator, confirmed that it has suspended all “real money activities to customers located in the US with immediate effect”, but would still make its free-to-play websites available to Americans.

Leisure & Gaming said yesterday that it had agreed to sell its US websites to Alistair Assheton, its former chief executive, for only $1, thus saving about $6 million in closure costs. Although it asked for trading in its shares to be suspended, it will continue running its UK and European operations and said that it believed it was “in a position to meet its outstanding commitments to creditors”.

By contrast, World Gaming, which a few weeks ago was near to clinching a £56.6 million takeover by Sportingbet, announced the appointment of administrators from UHY Hacker Young as a result of the US ban.

Empire Online said that it had terminated its US operations, accounting for 65 per cent of its revenues, with immediate effect, but expected to achieve positive earnings in 2007. It still intends to pay its recently announced interim dividend.

Empire said that it planned to develop its non-US operations while “leveraging its expertise in online marketing to other sectors in which it has not previously been involved”.

One internet gambling executive described the US ban as “corporate terrorism”, adding that it would merely drive the business underground. He said: “The reason why everyone has stopped today is fear — fear that, in the total absence of support from the UK Government, who have been breathtakingly silent on this issue, directors ran the very real risk of being extradited on trumped-up money-laundering charges.”

RIVALS TRADE BIDS FOR LCI

Shares of London Clubs International (LCI), the casino operator, rose by 3p to 128p yesterday amid speculation that Genting, of Malaysia, was to trump a 125p-a-share bid from Harrah’s, of the United States.

Genting, which already has 29.8 per cent of LCI, has just won Stanley Leisure and analysts believe that a move on LCI would be logical. One said: “It can’t lose. If it gets LCI, then it will be able to merge the two companies and reap big synergies. If Harrah’s comes back with a higher offer, then it will make a bigger profit from selling its stake.” Harrah’s is offering £280 million for LCI.

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