Betcorp, the Melbourne-based online gambling company is the latest group to suspend its operations in the United States in the wake of the new Unlawful Internet Gambling Enforcement Act signed by US president George Bush.

Although the company continues to trade with the customers of 87 other countries, a spokesman announced it had suspended the accounts of US residents with immediate effect in response to the enactment of the new law. Following the arrest of two high profile gaming executives, Betcorp had already labored through the fall of share prices in anticipation of the incoming measure. The company last traded on Friday at 45 cents, a drop-off of 75 percent since the Oct 2 announcement by US Congress.

The company which is set to de-list from the Australian Stock Exchange, has announced that it plans to concentrate its interests with its British operations. Despite the law excluding wagering on lotteries and horse racing, Betcorp announced it has cut its scale of operations by ceasing US marketing and slashing its workforce by approximately 33 percent.

The new US law prohibits credit card companies and financial institutions from making or taking payments from online gambling sites.

-Danny Davis

The new law restricting internet gambling in the United States continues to send shock-waves throughout the industry.

London-based Leisure and Gaming and Fairground Gaming have joined the ranks of companies that have or are on the brink of suspending operations in the US due to Congress’s decision to ban financial institutions from processing gambling transactions. A third company, FireOne also announced yesterday that it will cease operations effective on the day the new law takes effect. FireOne trades shares on the Alternative Investment Market. With the majority of the industry’s revenues racked up from its US customer base, the ban has hit the industry with brute force.

World Gaming announced Monday that it has ceased share trading in light of the ban, citing a loss of 95 percent of its revenue. While admitting it may be in breach of loan conditions, the company asked for trading to be suspended due to its “fundamental uncertainty over its ability to continue trading.� While Fairground fell from 8.5p to 14.5p, it plans to carry on operations despite the fact that the US fallout has wiped out 70 percent of its regular clientele. Other figures yesterday saw Leisure and Gaming rise from 0.75p to 8.75p, while FireOne lost 17.5p to 50p. Although Leisure and gaming is gearing its focus toward its domestic and Italian interests a decision on whether to sell or suspend its US operations are imminent.

The Unlawful Internet Gambling Enforcement Act is slated to be signed off on in a matter of weeks by US President George Bush.

-Danny Davis

The refusal of New York Governor George Pataki to sign an extradition warrant has made former SportingBet chairman Peter Dicks a free man.

A Pataki spokesman said that extradition can only take place if the accused person is present in the place where the law is broken. Although Pataki does support the fight being waged against online gambling, he doesn’t have the authority to legally extradite Dicks, the spokesman added. With 58 other warrants issued against internet gambling executives by the state of Louisiana, the decision rendered in a Queens courtroom on Friday is sure to come as a relief.

While Dicks was declared a free man by Judge Gene Lopez, the Louisiana warrants are still in effect for the other states according to Assistant District Attorney Kimberly Affronti. In telling reporters he is very grateful for his freedom, Dicks said he has no plans for a return to SportingBet following his resignation from the company to focus on his legal defense. His lawyer Barry Slotnik plans to get in touch with Louisiana authorities about the charges in an attempt to “put this matter to rest.� In the meantime Dicks said he plans on returning to the UK shortly.

As SportingBets chairman, Dicks was second high profile British gaming executive to be detained following the July arrest of former BetonSports CEO David Carruthers. Fired shortly after landing in the US, Carruthers remains under house arrest in St Louis, Missouri.

-Danny Davis

In the wee hours of Saturday morning, Congress has passed a measure that looks to have irrevocably changed the face of online gaming in the United States. The passing of the Internet Gambling Prohibition and Enforcement Act, sponsored by Sen. Jon Kyl (R-Arizona) and pushed-heavily by Senate Majority Leader Bill Frist, R-Tenn., has made it illegal for financial institutions in America to process credit cards, checks and other electronic fund transfer mechanisms to settle online wagers. The bill is the Senate’s version of a similar House bill passed in July, which was sponsored by by Rep. Jim Leach (R-Iowa) and Rep. Bob Goodlatte (R-Virginia). The bill will now go before President George Bush to be made law, and is expected to be signed into legislation within the next two weeks.

The measure was supported by various anti-gambling groups as well as the National Football League, while opposed by banking groups. Although the vast majority of internet gambling companies are headquartered outside the U.S., the majority of its customer base comes from within the country. The measure – not expected to affect gambling at tracks or casinos – was attached to a bill aimed at beefing-up port security.

Frist, who is eyeing a 2008 presidential bid,, had lobbied unsuccessfully of late to attach the measure to a bill involving military funding, but was shot-down as critics countered that a Defense Department bill was not the appropriate place for the gambling measure. Although similar arguments were put-forth with this bill, nonetheless, it passed.

Of note, with essentially legislating a prohibition on online gaming, conventional bookmakers are reportedly rejoicing over the news, with business expected to quadruple given the latest measure similar to how alcohol prohibition led to an unprecedented rise in illegal bootlegging.

- Rex Harris

Louisiana police have sent out a warning to all online gaming companies that if they accept bets from their state they are risking arrest and prosecution should they ever visit the US.

Four warrants - including one for the recently arrested Peter Dicks - had already been issued for associates of the popular internet firm Sportingbet. Apparently other gambling groups are also under investigation and have warrants out for their associates as well. The Ritz Club Online have decided to close their site to new customers and released a statement earlier this week saying that in light of the current confusion and inconsistency in online gaming legislation, the site will be closed to new clients effective immediately.

Overall shares in the online sector have tumbled in recent months as the aftershock from the David Carruthers arrest still resonates. Since then in addition to the Dicks arrest, the two founders of BWIN were rounded up by French authorities and told they were in violation of European gambling laws.

Meanwhile Empire Online, another UK listed site, has taken advantage of the market downturn by making acquisitions while the company values were low. After raking in a profit of $250 million from its sale of its poker division, Empire plans on reinvesting the money, albeit cautiously. With Empire shares closing at almost six percent higher at 64p, the value of the company has soared to over $350 million.

-Danny Davis