US settlement has Sportingbet soaring

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Sportingbet agreed last night to pay $33 million (£21.3 million) to the US Department of Justice in three instalments over the next 18 months.

That is much less than the $105 million settlement agreed by rival PartyGaming last year.

Andrew McIver, chief executive, said: "This settlement enables Sportingbet to draw a line under events of the past. It is in the best interests of our shareholders and we can now look to the future with increased confidence."

After a three-year investigation, Sportingbet admitted to the New York court that from 1998 to 2006 it offered internet betting, which was illegal, to customers in the US.

It also said it had used payment processing methods "designed to misrepresent the nature of its customers' gambling transactions to United States credit card issuers that disallowed the use of cards for internet gambling".

In addition, the firm agreed to supply any further information the court might want about people and businesses it dealt with in the US internet gambling concern.

Michael Campbell, analyst at broker Daniel Stewart, said the settlement made Sportingbet a more attractive takeover target.

He shifted his price target for the shares up from 100p to 130p.

Today those shares rose 8¼p or 12% to 78¼p — their highest since the US authorities took action against internet gambling in 2006.

McIver said: "Inevitably there is takeover speculation because we are one of the few companies with a 100% free float. But as far as the board is concerned the company is not up for sale."