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8/2/2006: Online Gambling - a shiver through IPO’s
The chill running through the online gaming industry in the wake of a high-profile U.S. crackdown seeped further into Canada yesterday after a British company with ties to a Quebec Mohawk reserve scrapped its initial public offering because of investor jitters.
Continent 8 Technologies PLC, which provides Internet services to online gaming Web sites, said it was postponing its IPO because of volatility in Internet gaming shares following the arrest two weeks ago of David Carruthers, the former chief executive of British online gaming company BETonSPORTS PLC, as he changed planes in a Texas airport en route to Costa Rica.
Mr. Carruthers, along with seven others, pleaded not guilty to racketeering and other charges Monday. An arrest warrant has also been issued for Gary Kaplan, the founder of BETonSPORTS, who lives in Costa Rica.
News of Continent 8’s decision to delay its IPO dealt a blow to the Mohawks of Kahnawake, Que., which own a 40% stake in Continent 8 and provide co-hosting services to the clients of online gambling firms, including Continent 8, through Mohawk Internet Technologies (MIT).
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