Know when to fold ’em
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Know when to fold ’em
TEXT OF STORY
SCOTT JAGOW: Today, President Bush is expected to sign a bill that will essentially ban Internet gambling in the U.S. One of the overseas companies that’s been doing business with Americans has decided its days of doing that over. Sportingbet sold its U.S. operations to private investors for $1. Eleanor Beardsley reports.
ELEANOR BEARDSLEY: Sportingbet took a gamble and lost.
Online betting in the U.S. was potentially a massive moneyspinner, but when Republican lawmakers pushed through a bill banning the practice earlier this month, it was clear the game was up for the British company’s American operations.
Sportingbet’s chief executive said he was sad to have to dispose of the U.S. business, but not too sad to keep a hard head.
According to investment analyst Justin Urquht Stewart, selling for one dollar rather than simply closing its operations was probably a smart defensive move.
JUSTIN URQUART STEWART: This is an area where it is now rather toxic for them to be operating in the states. It’s not so much selling it for $1, it’s also getting rid of all the liabilities that go with it.
Sportingbet said simply closing the business would have cost it $14 million in severance pay.
In Paris, I’m Eleanor Beardsley for Marketplace.
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