THE chairman of Sportingbet has been arrested by American authorities and charged with being involved in an illegal internet gambling operation, sending a fresh shudder through the sector.

Peter Dicks was detained at New York’s JFK Airport by the Police Department of the Port Authority of New York and New Jersey after a warrant was issued by the Louisiana State Police.

A spokesman said that Mr Dicks was going through a customs check at 11.30pm on Wednesday when a routine name check threw up an outstanding warrant against him issued by the gaming enforcement division of the Lousianana police.

A spokesman for the Port Authority police, which took him into custody, said: “We were acting as the middleman. We were informed that Mr Dicks was wanted on an out-of-state warrant. He’s being held by Port Authority police awaiting extradition [to Louisiana].”

Kevin Ryan, a spokesman for the Queens District Attorney, in New York, said that the warrant charged Mr Dicks with gambling by computer, a crime punishable by up to a year in prison.

Senior Trooper Dwight Robinette, of the Louisiana State Police, said that Mr Dicks had been arrested as part of a continuing investigation into Sportingbet. He confirmed that warrants were out on other unnamed individuals.

The arrest of Mr Dicks, 64, comes only two months after David Carruthers, the chief executive of BetOnSports, was arrested in Texas on alleged fraud and racketeering charges. Mr Carruthers, who has maintained his innocence, was on his way to Costa Rica at the time.

BetOnSports reacted by dismissing Mr Carruthers and winding up its US-facing operations. A question mark remains over the company’s ability to pay back money to customers, and last night some clients of Sportingbet started withdrawing funds from their accounts.

News of Mr Dicks’s arrest came after Sportingbet had announced talks to buy World Gaming for £60 million. However, the news of the US development sent World Gaming’s shares crashing 27½p lower at 64½p against the bid price of 104p. Sportingbet immediately asked for trading in its shares to be suspended at 239p, valuing it at £1 billion. In the current financial year some 35 per cent of Sportingbet’s profits are expected to come from US sports betting, although including its poker and casino arms the proportion of its total profits from America rises to 70 per cent.

Most states assert that sports betting is covered by the 1961 Wire Act. A Bill has been passed by the House of Representatives that, if approved by the Senate, would tighten the laws across the board. There are suggestions that some shareholders of internet gambling stocks could also be liable to prosecution. In its flotation prospectus for BetOnSports, Evolution Securities said that there was “at least some risk that such liability may extend to shareholders”, especially US citizens, but minority shareholders would be unlikely to face prosecution.

SHARES HIT A LOSING STREAK

Playtech down 25p to 247½p

Times Recommends

• Toyota recalls 437,000 cars including Lexus
• Myners says bonuses are bleeding pension funds
• Japanese company faked safety reports on seats