Shares in Sportingbet, the online bookmaker, plunged 40 per cent this morning after trading resumed following the arrest late last week of Peter Dicks, the chairman, on charges of alleged internet trading violations.
More than £400 million was wiped off the formerly £1 billion-plus company as the shares fell 95.5p to 143.5p.
The shares were suspended at 239p on Thursday morning at the request of the AIM-listed company, amid uncertainty surrounding the fate of Mr Dicks, who was being held at JFK Airport in New York.
Subsequent news of his arrest sent a shockwave through the online gaming world and wiped more than £1 billion of the value of listed companies in the sector. Mr Dicks was charged with violating Louisiana state laws on internet gambling.
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Today, Sportingbet disclosed that at a hearing on Friday Mr Dicks had been granted bail of $50,000 on condition that he surrender his passport and remain within the five boroughs of New York.
A further hearing is expected on Thursday at which authorities will try to have Mr Dicks transferred to Louisiana to face the charges. Sportingbet said it believed Mr Dicks would “vigorously contest” this request.
It reiterated that it had received no correspondence from the State of Louisiana “regarding this or any other related matter”.
The shares were suspended just four hours after Sportingbet had revealed that it was in preliminary takeover talks to buy smaller rival World Gaming for about £60 million.
However, with World Gaming generating 98 per cent of its business from the US, where the legality of online gambling is clouded with uncertainty, question marks exist over the future of the deal.
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The arrest of Mr Dicks came just two months after David Carruthers, the chief executive of BetOnSports, was arrested in Texas and charged with alleged fraud and racketeering. Mr Carruthers, who has continued to plead his innocence, remains in the US under effective house arrest.
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