USATODAY.com – Canadians can place online bets for next CEO to get boot
Canadians can place online bets for next CEO to get boot
By Del Jones, USA TODAY
People who want to do more than just read about CEOs getting booted now can try and cash in on the next executive suite ejection.
Online site Betfair this month introduced wagering on the fates of CEOs of nine troubled companies. While this might have you reaching for your credit card with plans to bet on who will be the next to suffer the fate of someone like Franklin Raines of Fannie Mae, put your wallet away. The betting is only on CEOs of Canadian companies, and it’s not open to U.S. gamblers.
Gambling on non-sporting events such as CEO job security is illegal in the USA and almost certain to remain that way. Laws vary state by state. Even Nevada, which allows sports gambling, does not permit betting on non-sporting events such as the Oscars, says Anthony Cabot, a partner at Lionel Sawyer & Collins in Las Vegas and an expert on gaming law. CEOs can rest assured that there won’t be any rush by states to allow betting on their fate, Cabot says.
Betfair, a British firm, says it accepts no U.S. bets, at least not since 2002 when the 3rd Circuit Court of Appeals upheld the seizure of $490,000 wagered by Americans on another British Web site.
CEO wagering is legal in the United Kingdom but is not available because the Brits are bored by the prospects of CEOs getting sacked, says Jordan Ferguson, Betfair’s head of international sales.
Brits use Betfair to wager on everything from snooker to U.S. football, but the only gamblers interested in CEOs are North American, and U.S. laws make Betfair restricted to Canada, Ferguson says.
Betfair does not back wagers but acts as a middleman for customers wishing to take different sides of a bet. Betfair’s revenue comes from keeping 2% to 5% of the winning bet, Ferguson said.
Volume has been light. Less than $100,000 was wagered for or against CEOs in the first two weeks, Ferguson says.
Arthur Millholland, CEO of Calgary-based oil exploration company Oilexco, has been the most likely to lose his job by April 30, 2005, according to Monday’s betting on the Betfair site. Someone who bets $10 that Millholland will still be around next spring would get about $20 if he survives.
Relatively safe, at least among the nine CEOs on the hot seat, is American Bill Owens, CEO of Nortel Networks, an Ontario-based telecom giant that has seen its stock price cut by more than half since February. A $10 bet that Owens will survive until April 30 returns about $14.50.
Asked for comment about the wagering over Owens’ fate, Nortel spokeswoman Tina Warren said in an e-mail: “Mr. Owens is committed to Nortel and excited by its prospects for the long term.”
Five other Canadian companies contacted, including Oilexco, had no comment or did not return calls or respond to e-mail.