Sportingbet Pays $33 Million For Flouting UIGEA (2006)

Sportingbet PLC has agreed to pay the U.S. Department of Justice (DOJ) $33 million to settle the dispute concerning the company’s illegal online gambling operations in the US between 1998 and 2006.
As part of the settlement the London based company will be free from prosecution for its former activities contrary to the UIGEA, in return for admitting its guilt and agreeing to pay the $33 million sum. It also agreed to no longer accept any wagers from the US.
In 2006, Sportingbet’s chairman at the time Peter Dicks was arrested at New York’s JFK airport and imprisoned briefly before returning back to the UK. Soon after, the company’s US poker operation Paradise Poker stopped accepting US customers and Sportingbet’s other US-facing gambling businesses were sold off.
Sportingbet have now admitted to having disguised the country of origin of its US customers at the time, and manipulating and masking any payments to them through its payment processing practices.
Commenting on the deal, Sportingbet CEO Andrew McIver said: “This settlement enables Sportingbet to draw a line under events of the past. It is in the best interests of our shareholders and we can now look to the future with increased confidence.”
Despite having to pay out $15 million this year, $12 million in 2011 and $6 million in 2012, the market reacted favourably to the news of the settlement and shares in the company soared 14% to 79.3p at the start of the day.
Striking an optimistic tone for the future, McIver explained: “The resolution of any risk associated with Sportingbet’s former US-facing business, combined with the considerable actions taken by the Group over the past three years, ensure that the Group is well placed to capitalise on the many opportunities available in the global online gaming industry.”