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  • Sporting Bet, Paradisepoker, Sell US Business for $1

    Tuesday, October 17th, 2006 by Mike

The US passed a law earlier this month which will make internet gambling illegal. Many industry observers doubted that the Act would make it through the Senate since similar legislation had failed a number of times, but it was attached to an unrelated ports bill which was passed by the Senate. It will become law when signed by the US President.

“Since the passing of the Unlawful Internet Gambling Enforcement Act of 2006 (the “Act”) by US Congress on 29 September 2006, the Board and its advisors have undertaken a comprehensive legal and strategic review with regard to the Group’s US operations,” said a Sportingbet statement. “The advice received was consistent in substance and concluded that Sportingbet should not continue to provide gaming services to US based residents.”

Sportingbet (owners of Paradisepoker) estimates that the cost of closing the US business and paying severance packages would be $14m, and that the combined savings of those costs plus disposed-of liabilities amount to $27.2m.

The sale will only proceed if the Act becomes law. If the US President does not sign the Act into law the business will revert to Sportingbet and a fee of $500,000 will be paid to Jazette.

“We are saddened to have to dispose of such a fantastic business as a result of political actions in the US Congress. The sale however, prevents significant closure costs which would have been both expensive and time consuming,” said Andrew McIver, Chief Executive designate, said of Sportingbet.

“It also preserves the employment of those of our colleagues who have worked so hard to build the US operations into the highly profitable business it is today. Sportingbet will now focus on developing its business in other key markets of the world,” said McIver.

Under the terms of the deal Jazette will not take bets from outside the US for two years and from outside of the Americas for three years, according to Sportingbet. It said that Jazette will not use the urls it has bought – wallstreet.com, aces.com and sportingbetUSA.com – for US gaming purposes.

US players can still play poker online at FullTiltPoker 24 hours a day, 7 days a week.

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