Sportingbet Chairman Freed On Bail

The chairman of UK-based online gaming firm Sportingbet has been granted a $50,000 bail by a US court.

Peter Dicks was held in New York on Thursday under a warrant issued by state authorities in Louisiana accusing him of "gambling by computer". The court in Queens, New York, also ordered him to surrender his passport.

Mr Dicks is to face another hearing on 14 September 2006 when the New York court will consider a request by the Louisiana authorities to extradite him.

News of the arrest triggered a sharp drop in gambling shares on Thursday, but stocks have since steadied.

Sportingbet's shares have been suspended, but shares in rival Partygaming closed just 0.25% lower after slumping 10% on Thursday, while 888 Holdings added 1.04% after slumping 16% a day earlier.

In a statement to the London Stock Exchange, Sportingbet vowed to continue operating as normal, including continuing to accept bets from the US.

It also added that it had not received correspondence from any US authority regarding "this or any related matter".

The company, which also owns the Paradise Poker brand, has more than 2.5 million registered customers and an annual turnover in excess of $1.2bn (£630m) - about 70% of its profits are generated in the US.

Mr Dicks' arrest follows the detention of Betonsports' chief David Carruthers, who was arrested on racketeering charges at Dallas airport in July.

The arrests are the latest in a string of US moves designed to discourage internet gambling.

At a brief hearing in the Queens county court, his lawyer, Peter Neiman told the court: "He is really not a flight risk. This is not some mobster who has connections to the crime world."

In the US, online gaming is a $12bn a year business that is expanding despite the government's opinion that it violates a law against placing interstate bets using telephone lines.

This has prompted Congress to propose a US law banning banks and credit card companies from processing internet gambling payments.