More tough news for online sportsbook operators as the US authorities have struck again as enforcement officers in New York arrested late Wednesday night Peter Dicks, chairman of the board of SportingBet, an online sports book that is publicly traded on the London Stock market.
Legal experts with knowledge of the case said Mr. Dicks had been detained at Kennedy International Airport based on a warrant issued by the state of Louisiana. Louisiana state police were unavailable for comment.
George Hudson, a spokesman for SportingBet, declined to comment. The arrest led the company to halt trading on its stock.
The arrest of Mr. Dicks comes seven weeks after federal law enforcement officials arrested the chief executive of a competing Internet sports book, BetOnSports, when he was on a flight layover at the Dallas airport. The executive, David Carruthers, and his company, which also trades on the London Stock Exchange, were charged with taking bets illegally over the Internet.
The federal government, and some states, assert it is illegal to operate an Internet casino. But their position puts them at odds with the policies for licensing license and regulating online betting parlors in many countries, including Costa Rica and Antigua, where many casinos base their operations.
It also puts the states and federal government in conflict with millions of Americans who place bets online, using their home computers to wager on sporting events and games like blackjack and poker.
After the arrest of Mr. Carruthers, legal experts and industry analysts and executives, said they presumed that the American law enforcement effort was aimed at one company, BetOnSports. But that presumption has changed.
“We thought this was company specific. Now we know it’s broader than that,” said Sue Schneider, the publisher of Interactive Gaming News, an online magazine that focuses on the Internet online casino industry. “Now we know it’s broader than that.”
Ms. Schneider, echoing the sentiments of other industry analysts, had said the one obvious lesson after the arrest of Mr. Carruthers was that executives of online casinos should not visit the United States and risk arrest. She and other analysts and legal experts said it was mind-boggling that Mr. Dicks had visited anyway.
“It’s absolutely amazing,” said I. Nelson Rose, a professor and Internet gambling expert at Whittier Law School in Costa Mesa, Calif. Mr. Rose speculated of Mr. Dicks: “Apparently he convinced himself this all involved Carruthers and BetOnSports.”
Mr. Carruthers, who was let go as chief executive of BetOnSports, is under indictment by the attorney general for the Eastern District of Missouri, Catherine L. Hanaway. Reuters reported that it had confirmed with the Louisiana State Police that Mr. Dicks was arrested as part of an indictment issued in May that was part of an ongoing investigation of SportingBet.
Lawrence Walters, a Florida attorney who specializes in Internet gambling law, said Louisiana has been interested in recent years in exploring whether online gambling operations violated state law that prohibits residents under the age of 21 from placing wagers.
But, more generally, Mr. Walters said he doubted that state laws could be read as regulating Internet gambling because the activity crosses state lines and thus would fall under federal jurisdiction.
“State law cannot be applied constitutionally to Internet transactions given the Commerce Clause,” Mr. Walters said. He added that if state law is ultimately seen as being applicable, it could create an enormous headache for offshore casinos.
“It would be a substantial and costly effort to have 50 lawyers in 50 states,” he said, adding more generally of the arrest: “It’s a concerning development and one that’s going to potentially require the industry to re-evaluate its legal position.”
Under Louisiana law, it is illegal to place a wager on the Internet and to operate an Internet casino. The law says that the state is concerned about protecting citizens, in particular underage residents, from “the pervasive nature of the gambling which can occur via the Internet.”
The law makes placing an online wager a crime punishable by up to $500 or six months in prison, or both. The penalty for operating an online casino is up to a $20,000 fine and five years in prison.
For its part, SportingBet, one of the largest online gambling operators in the world, had revenue of more than $190 million for the financial year ending in July 2006, with two-thirds of the revenue generated from the United States, said Mr. Hudson, the company spokesman.
As for Mr. Dicks, 64, Mr. Hudson described him as a father of four who built a career investing in technology companies both in the United States and Britain.
“He’s not a swashbuckler like some of those other online betting types,” Mr. Hudson said. “He’s just a plain vanilla kind of a man.”
Mr. Dicks joined SportingBet as nonexecutive chairman in January 2000.