Wednesday, September 27, 2006

William Hill Plc, the second- largest U.K. bookmaker, said it will stop
taking online poker and casino bets from American customers until the scope
of a U.S. crackdown on Internet gambling becomes clearer.
William Hill already blocks U.S. sports bettors, Chief Executive Officer
David Harding said today in a telephone interview. The new measures also
will bar American customers from playing the London-based company's Web
casino and poker games, he said.

``We have always taken a passive marketing approach to U.S. customers and
have never actively sought out U.S. online business,'' the CEO said. ``Now,
on the basis of legal advice, we are blocking U.S. business entirely.''

William Hill is acting after U.S. authorities arrested managers of British
Internet bookmakers Sportingbet Plc and Betonsports Plc in the last 2 1/2
months. Legislators in the U.S., where the government views Internet gaming
as illegal under a 1961 law, in July approved a measure to stifle online
gambling by restricting the flow of money to illegal gaming Web sites.

The online division of William Hill gets 0.5 percent of gross win, or the
amount customers lose on bets, from U.S. bettors, according to Harding.
American gamblers make up 0.1 percent of total gross win, he said. The
company has more then 2,000 British betting shops in addition to its Web
sites.

`Insignificant Business'

``It's an easy decision for William Hill to make, because it's quite an
insignificant business for them and their archrival Ladbrokes doesn't take
any U.S. bets,'' said Matthew Gerard, an analyst at Investec Securities in
London.

Shares of William Hill fell 2 pence, or 0.3 percent, to 644 pence at 3:14
p.m. in London. They have added 12 percent in the past year, less than the
22 percent advance by the 30- member FTSE 350 Travel & Leisure Index. The
bookmaker has a market value of 2.30 billion pounds ($4.3 billion).

Online gambling is a growing $12 billion-a-year business for companies
including PartyGaming Plc operating from places such as Gibraltar. U.S.
officials say Internet betting sites may launder money and sell drugs and
lack safeguards to screen out minors and gambling addicts.

Peter Dicks has resigned as chairman of Sportingbet since his arrest in New
York this month on charges of illegal computer gambling. David Carruthers
was CEO of Betonsports when he was arrested in Texas in July for crimes
including fraud and racketeering and has since been fired.

William Hill, Ladbrokes and Rank Group Plc may benefit if investors become
concerned about the outlook for Internet gambling companies after the U.S.
arrests, Merrill Lynch & Co. said July 19. Clients may become less confident
in gaming companies that have only Internet activities, Merrill said.

World Gaming Plc, which runs gambling Web sites and licenses betting
software, said Sept. 25 its chairman and a director resigned so they could
travel ``freely'' to the U.S.

By Joyce Gatsoulis (Bloomberg)