Betcorp mulls options after US laws trigger sale of gaming...

Betcorp mulls options after US laws trigger sale of gaming unit
Source: MELBOURNE, Nov 2 AAP
Published: November 02 2006, 1:17PM

Online gaming operator Betcorp Ltd says it is considering several options for the future after recently-passed laws in the United States effectively banned online gaming by US residents and ended Betcorp's most profitable operations.

Betcorp, which is based in the West Indies but incorporated in Australia, announced last month that it was preparing to close shop as a result of the US laws.

Betcorp has entered into a deal to sell the group's gaming operations headquartered in Antigua and IT and marketing divisions based in Toronto to Central America's Bodog Entertainment Group for $US11 million. advertisement

advertisement

Following the sale of the gaming operations, Betcorp will have no trading activity and its only asset will be cash.

Betcorp last week delisted from the Australian Stock Exchange (ASX), and the company is preparing to delist from London's Alternative Investment Market.

Betcorp chairman David Hudd told shareholders at the annual general meeting that Betcorp had received some approaches from parties interesting in using the company's "cash shell".

Other options include being taken over, making an acquisition or liquidation where the company may return an estimated 35 cents per share.

Mr Hudd says he prefers striking a deal with another company to winding up the business.

"Returning the cash to shareholders in a liquidation scenario is not a very efficient way of doing it," he said.

"We have got supportive shareholders. It would be nice if we could find a transaction which can restore shareholder value so we're looking at that."

Mr Hudd said Betcorp probably had about six months to decide upon its future.

The online gaming operation of Betcorp and many similar companies were effectively destroyed with the passage of the Unlawful Internet Gambling Enforcement Act in the US on October 13, 2996.

The law bans the receipt of funds from US residents by online entertainment companies located in any other country of the world in connection with internet gambling.

Betcorp shares were at 33.5 cents when they ceased trading on the ASX.