In analyzing Ladbrokes’ bid to acquire 888.com, The Guardian’s Richard Wachman echoes the widely held opinion that Lads’ shareholders should be concerned by 888’s lack of a Sportingbet/PartyGaming type of ‘make good’ deal with the US Dept. of Justice. According to Wachman, the fact that 888 took in gambling money from US citizens leaves a Ladbrokes/888 union vulnerable to the long anti-gambling arm of US law.
We think Wachman’s got things wrong here (and not just because the website misspelled Ladbrokes as ‘Labrokes’). 888 stopped serving US customers in 2006, following passage of the Unlawful Internet Gambling Enforcement Act (UIGEA). While the DoJ claims that 888 owes them $120m in penalties for serving US customers, US courts have issued rulings that the Wire Act applies specifically to sports betting, yet 888 didn’t launch their sportsbetting channel until 2008.
Ladbrokes, on the other hand, is first and foremost a sportsbetting company. Despite their post-UIGEA public pronouncement that they were rethinking plans to enter the US market, presumably, at some point in their illustrious history, Ladbrokes has taken at least one bet from a US citizen. So it’s theoretically possible that 888 shareholders are the ones that should be concerned by a possible union with Ladbrokes. (It’s also possible that Guardian writers would be better informed on these issues if they spent more time reading CalvinAyre.com. Just sayin’. Come for the topless ladies, but stay for the world class online gaming info.)
That said, we think the odds of Ladbrokes CEO Richard Glynn being targeted for extraditon are slim, as the US appears to be losing interest in using its criminal justice system to go after international gambling operators. Instead, US law enforcement is focusing its attention on the eCom operations of big pure poker companies like PokerStars and Full Tilt.
Anyway, US legal issues are the least of Ladbrokes’ worries at present. With no clear vision of where it wants/needs to go, Ladbrokes has problems that no messy takeover – especially of a company undergoing its own competitive challenges – can solve. Truth be told, there are so many obstacles in CEO Richard Glynn’s path that, should he somehow manage to pull this off, he could sell the story to Hollywood as an addendum to the Lord Of The Rings franchise.
But hey… We wish Frodo, er, Richard luck in his quest. Ladbrokes is a fixture in our industry, and the gambling world would be a poorer place without them in it.
