UK net gaming cos sell US units
Britain’s Sportingbet has pulled out of the US ahead of a ban on internet gambling by selling its US operations to private investors for $1. “We are saddened to have to dispose of such a fantastic business as a result of political actions in the US Congress,” Sportingbet chief executive officer designate Andy McIver said on Friday.
“Sportingbet received cash consideration of $1 for the shares and related assets of the US operations, and has discharged excess liabilities amounting to approximately $13.2m,” the company said in a statement.
The chief executive officer of Britain’s Leisure & Gaming said on Friday he was leading a management buyout of the group’s US operations for $1 ahead of prohibition taking force. Alistair Assheton said: “Leisure & Gaming simply could not keep the US business going, but it’ll be just fine with its Italian business. The company saves about $6m in shut-down costs, and we wanted to protect about 300 jobs in the US operation.”
Sportingbet’s exit from the US comes after Republican legislators delivered a heavy blow to internet gambling this month when Congress unexpectedly approved a bill at stopping the practice.
President George W Bush is expected to sign the measure into law later on Friday. The industry is now splitting between London-listed companies, which are pulling out of the US, and privately owned businesses that are prepared to take illegal bets from offshore.
The US operation, Sportsbook.com, was sold to Jazette Enterprises and will now operate as a private company with offices in Dublin, Antigua, Vancouver and Costa Rica. Sportingbet will retain its Paradise Poker business, but will stop accepting US money later on Friday. “Had the business been closed, the board estimated that the cost of severance and closure would have amounted to approximately $14m — a total saving of circa $27.2m,” it added.
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