Carruthers' Guilty Plea Goes over Neutral on London Stock Exchange

2 April 2009
When David Carruthers was arrested in July 2006, London-listed online gambling firms lost approximately £300 million in value, but following Mr. Carruthers' guilty plea in a United States federal court Wednesday, the news appears to have gone over neutral with investors.

Between Wednesday -- when Mr. Carruthers, the former chief executive of BetonSports, appeared in court -- and Thursday, PartyGaming, which is in negotiations with the United States Department of Justice, fell 7.28 percent to 223 pence, and 888 Holdings, also in negotiations with the department, fell 6.14 percent to 95.50 pence.

However, Sportingbet, which, too, is negotiations with the Justice Department, went unchanged, and Neovia Financial, which settled with the department, fell 3.49 percent to 41.50 pence.

On the suppliers' side, Playtech Ltd., which is not known to be in negotiations with the Justice Department, rose 2.75 percent to 458.25 pence, and CryptoLogic Ltd., also not in discussions with the department, went unchanged.

Between July 17-18, 2006, when news of Mr. Carruthers' arrest in Texas was publicized, Sportingbet was the biggest loser, dropping 35.4 percent to 182 pence, followed by Playtech, which fell 28.1 percent to 298.5 pence.

PartyGaming fell 17.2 percent to 852 pence, and 888 dropped 12.6 percent to 168.5 pence. Neovia fell 15.1 percent to 369 pence, and CryptoLogic dropped 2.5 percent to 1143 pence.

Chris Krafcik is the editor of IGamingNews. He lives in St. Louis, Mo.