SportingBet Settles $33 Million Fine With US Justice DeptartmentMarch 28, 2012 1:35 pm
UK online gaming firm SportingBet had operated in the US between 1998 and 2006, but then pulled out of its online betting market after president George Bush introduced the UIGEA. In September 2010 the company then admitted attempting to disguise payment to US players and subsequently agreed to pay the DoJ an amount equivalent to that earned from SportingBet’s US customers over the eight year period, which was set at $33 million.
The deal with the DoJ ensured SportingBet immunity from US prosecution in return for paying three installments, which included $15 million in 2010, $12 million in 2011, and this year’s final payment of $6 million. Following the resolution of the settlement, SportingBet’s chief executive Andrew McIver commented:
“This final payment formally closes any risk which the company may have faced from its former activities in the US. Given that the US market continues to show signs of regulating both by product, and by state in the near future, various opportunities exist to re-enter the US market and we are reviewing these.”
While US online gambling is unlikely to be legalized at a federal level, the potential exists for individual states to regulate their own online ventures. Nevada has already made moves in this direction, while Connecticut has also signalled interest in that direction with Sportingbet and Foxwoods Resort Casino currently in advanced discussions to that end.
Once news of SportingBet’s final payment was announced, the company’s share price rose 0.5p to 39.5p with Oriel Securities analyst Jeffrey Harwood speculating that the shares were still undervalued compared to its “sum of the parts valuation of 61p per share.” SportingBet currently has over two million customers across Europe, Australia, Canada, South America and South Africa, but any progress in its attempt to re-enter the US market would likely give the company’s shares a further boost.