SPORTINGBET, the internet gambling group whose chairman was this week arrested in New York, was in urgent discussions last night with Stock Exchange officials and its advisers with a view to resuming trading in its shares on AIM early next week, The Times has learnt.

The company asked for trading in its shares to be suspended on Thursday morning as soon as it became aware that Peter Dicks, its non-executive chairman, had been arrested at JFK airport late the previous evening on a warrant issued by Louisiana State Police.

Mr Dicks had been travelling to a board meeting of Nasdaq-listed Standard Microsystems, of which he is also a director.

The move to resume share trading is in stark contrast to the rival BetOnSports, whose shares remain suspended almost two months after the arrest of its then chief executive, David Carruthers, on US racketeering and wire fraud charges.

The news suggests that Sportingbet, unlike BetOnSports, has no intention of closing its US-facing gambling operations. Analysts believe that BetOnSports, which is struggling to repay money held in customers’ accounts, may not survive.

The decision on when trading in Sportingbet shares can restart will depend on clarification of Mr Dicks’s legal position over the weekend.

Mr Dicks was last night given $50,000 bail after being held in New York’s notorious Rikers Island prison.

On Thursday evening, Mr Dicks had been refused bail by New York City Criminal Court, after the judge claimed that the court lacked the authority to make such a decision. Peter Neiman, Mr Dicks’s lawyer, had told the court on Thursday: “He is really not a flight risk. This is not some mobster who has connections to the crime world.”

Mr Neiman was last night continuing to oppose an extradition of Mr Dicks to Louisiana, where he is accused of illegal internet gambling.

According to a statement from Sportingbet yesterday, Mr Dicks was arrested “for the alleged violation of Louisiana state laws to gambling by computer”. The state’s laws differ from the 1961 Wire Act, under which Mr Carruthers was arrested, in that they explicitly bar internet gambling.

The company, which said that it “continues to operate as normal”, added: “The group itself has not received correspondence from any US authority regarding this or any related matter.”

However, the Louisiana state police have made clear that the arrest of Mr Dicks relates to continuing investigations into the activities of Sportingbet and that further warrants have been issued against other unnamed individuals.

Under Louisiana laws, those convicted of running a computer gambling operation face a sentence of up to five years in jail “with or without hard labour” and a $20,000 (£10,700) fine. The laws appear to make no distinction between sports betting operations, covered by the Wire Act, and casino and poker games, which are deemed to fall outside its scope.

Paddy Whur, licensing partner in Walker Morris, the solicitors, said: “No one who operates within the industry can be sure whether a warrant is in existence for them.”

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THE LEGAL POSITION FOR DIRECTORS AND SHAREHOLDERS

By Jason Chess and David Bintliff

The simple answer is: sports betting has always been illegal, but the situation with other parts of online gambling – such as casino gaming and poker – is still unclear.

The relevant legislation is the 1961 Interstate Wire Act. It is clear that sports betting via phone lines, which includes the internet, is illegal. Only one person – Jay Cohen, former president of World Sports Exchange – has been convicted for running an online gambling company and it’s notable that the company concerned was an online bookmaker. Sportingbet, similarly, is primarily a bookie but it does offer casino and poker gaming. It is harder to make the case that these products are illegal under the Wire Act. The US Department of Justice has stated that it regards online gambling as illegal.

The important thing to note is that the law has not changed: the Wire Act still applies. A Bill to ban explicitly all online gambling is being discussed in Congress but may not become law. All that is happening is that different states are applying the Wire Act in different ways.

There is no clarity on whether the arrest of Peter Dicks, following the arrest of David Carruthers of BetOnSports, is part of a concerted campaign or crackdown. It was widely hoped that Mr Carruthers’s arrest was a one-off and linked to the specific circumstances connected to BetOnSports, ie, the online gaming industry hoped Mr Carruthers’s arrest was “non-contagious”.

However, the Louisiana State Police arrested Mr Dicks with a sealed warrant and it is known that there are other names on it – assumed to be of other Sportingbet directors. The US authorities haven’t been proactive in securing arrests, though. It thus seems likely that more arrests will happen, but only if executives put themselves within easy reach of the authorities.

Jason Chess is a partner of the media and technology law firm Wiggin LLP and David Bintliff is an assistant

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