Online gaming auditors on red alert over travel to US
Online gaming auditors are being advised not to travel to the United States, as the hysteria over the US gambling crackdown reaches fever pitch
BDO Stoy Hayward is understood to have advised partners who work for online
gaming companies to avoid travelling to the US.
The mid-tier firm is the leading accounting firm in the internet gambling
sector and has acted as auditor or reporting accountant for industry giants
PartyGaming, 888 Holdings and Sportingbet, which operates the ParadisePoker
brand (pictured above).
Accountancy Age understands that following the recent aggressive
clampdown on internet gambling by US authorities, BDO Stoy Hayward revised its
risk management policy and advised partners who had worked for any of its online
gaming clients to avoid travelling to the US for business purposes.
The firm would not comment on the issue, saying that its risk management
policies were confidential.
US authorities indicated that no BDO Stoy Hayward partners have been targeted
for arrest for working on internet gaming accounts.
Brad Ockene, a partner in the Chicago office of law firm Lovells, said all
the US laws prohibiting online gaming include provisions for aiding and abetting
the activity, which means that any advisers could be arrested by authorities
when entering the US.
The fact that advisers to internet gambling groups may now be on the radar of
US authorities will come as a shock for auditors across the UK, with concerns
about extradition issues making British business increasingly nervous.
Following the arrests of BetonSports chief executive David Carruthers and
former Sportingbet chairman Peter Dick, it was believed that it was only the
executives of online gaming companies that could be at risk.
But the concerns of BDO suggest that US authorities could cast their net much
wider to include lawyers, bankers and auditors.
Reports that there are approximately 50 warrants of arrest out on businessmen
involved in online gaming will do nothing to alleviate those concerns.
The crackdown on internet gambling in the US and the risks faced by
individuals involved in the industry intensified this week with the passing of
the Safe
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Port Act by US congress. The act outlawed the processing of payments between
US customers and online gaming companies.
The legislation caused massive losses across the online gaming sector in
London trading on Monday, as the biggest industry players derive more than half
of their income from the US. The losses mean that the UK will no longer have an
auditor in the FTSE 100 outside of the Big Four.
Auditor of PartyGaming, BDO Stoy Hayward, was the only mid-tier firm with a
FTSE 100 audit, but after PartyGaming lost 57% of its value following US
developments the company is set to plunge out of the top index when it is
updated.
FACTS/FIGURES
£3.7bn
The value wiped off online gaming stocks on Monday
57.9%
The drop on PartyGaming’s share price
For more on online gaming see
www.partygaming.com