Hill, Ritz end U.S. operations

William Hill's policy had been to accept poker and gaming action from American residents but not sports betting. But the UK's second largest bookmaker decided Tuesday that taking poker and casino bets from U.S. residents wasn't worth the risk. "Our legal advice was and is that it is legal to accept online poker and casino in the U.S.," said CEO David Harding in The Times of London. "But with all the things that have been happening we decided it was the prudent thing to do."

Like William Hill, Ritz Club London is a prominent gaming company that is known more for its land-based operations that its online properties. The company took its website down Friday and replaced it with the message: "In light of the current confusion and inconsistency in online gaming legislation worldwide, the owner of The Ritz Club London Online have, regretfully, decide to close the site to new customers with immediate effect."

Players already registered with Ritz Club Online are still able to play in its online casino.

The British approach to gambling is traditionally different than that of America's. Betting on sports is legal throughout the UK, and William Hill operates more than 2,000 betting shops where customers can watch sporting events and place wagers.

Shaky legal ground

The U.S. Wire Act specifically prohibits sports betting, but legal experts say that because the act was written in 1961, its language is not adequate to address casino gaming and poker played over the Internet.

"It doesn't apply to anything but sports betting," says Martin Owens, an attorneywho specializes in online gambling cases.

The arrests of two online gambling executives over the summer has prompted online casinos to re-evaluate doing business with U.S. customers. The chief executive of one public British betting company, BetonSports, was arrested on federal charges upon entering the U.S. in July while the non-executive chairman of another, Sportingbet, was arrested earlier this month on a warrant from the state of Louisiana. Yesterday two board members of a third British public company, World Gaming, resigned because they do other business in the U.S.

"When you've got people resigning from the licensed companies, all you're doing is driving the law-abiding people away from this," said Owens. "There's no way they're going to make a $12 billion market disappear."

In 2005 UK lawmakers passed legislation to license and regulate online gambling. The legislation will take effect in 2007 and is expected to bring some of the companies who operate from offshore jurisdictions like Gibraltar and the Isle of Man to the UK where they would pay taxes to the British government.