Betcorp folds after US clampdown

Online gaming group Betcorp said today it was closing its operations rather than attempting to cope with new legislation outlawing internet gambling in the United States.

The firm, which is listed on London's Alternative Investment Market (AIM), agreed to sell its online betting business to Bodog Entertainment in a deal worth $11m (€8.7m).

Betcorp, which earned 85% of its revenues from US customers in the last four months, said it would struggle to cope without stateside income.

The decision comes following tough new US legislation passed earlier this month, which bans online gambling firms collecting bets from America.

The news comes in the face of defiance from rival gaming firms, which have outlined plans to abandon the US and focus on increasing customer numbers elsewhere in the world.

Australian-based Betcorp said in a statement: "The board has considered whether its non-US business could be profitable on the basis of a substantially reduced cost base, but has determined that this would not be possible without a major increase in trading volume.

"In the current environment, such expansion would require substantial investment in marketing and brand development, or the acquisition of non-US facing operators.

"The group does not have access to the funds required to adopt either of these strategies and accordingly, the board has concluded that it is in the best interest of shareholders to dispose of the group's entire gaming operations and infrastructure."

The deal - if rubber-stamped by shareholders - will see Bodog pay $9m (€7m) to Betcorp and take on $2m (€1.6m) worth of current gaming operation liabilities.