Betcorp Backs Away From U.S. Players
Published: Tuesday, August 15, 2006 Online-Casinos.com
BETCORP BACKS AWAY FROM U.S. PLAYERS
No more telephone bets from Americans says sportsbook company in reporting excellent results
London listed Australian gambling group Betcorp has become the latest online sportsbook company to stop taking telephone bets from American residents, and is reviewing its US-facing businesses in the wake of the BetonSports arrests and charges (see earlier Online-Casinos.com and InfoPowa reports).
Like BetonSports before the calamity, US business accounted for up to 85 per cent of the total and telephone bets 9 per cent of revenues for the company.
CEO Clive Walker says that Betcorp continues to monitor its American-facing businesses in the light of continued uncertainty about the legality of online gaming. "We're registered in Antigua, where we take bets. The view we'd understood from our legal advisers was that we had been acting legally and appropriately. Recent events have cast that into doubt," Walker says.
Betcorp shares lost more than 40 percent in value following the arrest in Texas last month of BetOnSports chief executive David Carruthers, and said it was taking steps to minimise the legal risks associated with the American market "to the maximum extent practical".
Walker remains optimistic, and has maintained that the company is highly cash generative and would expand geographically outside the US. He said the focus would be on markets in Europe.
He also said that trading in the wake of Mr Carruthers' arrest, a period not covered by the company's interim results published today, had remained strong. "Trading has been very good. It's a big marketplace. We feel it has been very positive across all areas," Mr Walker said.
No longer taking bets from US customers will have "an adverse effect on sports betting turnover but will be partially offset by personnel and telecommunication cost reductions and the migration of telephone activity to the internet", a Betcorp spokesman said.
The company maintained that just "a handful" of jobs will have been lost as a result of ending telephone betting in the US. "We anticipate that the overall effect on profitability will not be material," the spokesman added.
Disclosure of the move to end US telephone bets came as Betcorp reported a 146 percent jump in pre-tax profits to $4.6 million during the six months to the beginning of July, a period prior to the apparent crackdown on online gaming by the US authorities.
Betcorp said total gross revenues from players rose 75 percent to $22 million and active customers increased by a third during the period to 27 281.
