Had a Bad Day

[dijeetyet]

Posted by: The Rainmaker
In reply to: $treet Trader who wrote msg# 206150 Date:10/9/2007 5:42:26 PM


UBET ($2.00) 8K filed. Talk about having a bad month sheesh.
Form 8-K for YOUBET COM INC

9-Oct-2007

Other Events


Item 8.01. Other Events

Regulatory Developments

On September 19, 2007, a law passed by the Arizona legislature took effect that makes it a felony to accept or place a wager on a horse race anywhere in Arizona except at a licensed track or off-track betting parlor. In light of this new law, we have ceased to accept wagers from Arizona residents. We are examining our alternatives, including a challenge to the constitutionality of this new law.

On September 26, 2007, we also ceased to accept all wagers from customers in the District of Columbia. The Oregon Racing Commission (ORC), the entity that licenses our advanced deposit wagering (ADW) operations, has informed us that it had concluded that ADW companies should no longer accept wagers from the District of Columbia. Accordingly, we promptly ceased to accept wagers from District of Columbia customers. Our previously approved ORC operating plans had included the District of Columbia as an "allowed" wagering jurisdiction.

Customers from Arizona and the District of Columbia, in the aggregate, represented 2.7% of handle for the year ended December 31, 2006 and 2.5% of handle for the six months ended June 30, 2007. We do not expect the inability to accept wagers in Arizona and the District of Columbia, either individually or in the aggregate, will have a material adverse impact on our financial position, results of operations or cash flow.

Legal Proceedings

On September 19, 2007, Colonial Downs, L.P. and the Virginia Horsemen's Benevolent and Protective Association filed a lawsuit against our company in the U.S. District Court for the Eastern District of Virginia. The complaint alleges that we are operating as an ADW provider in the Commonwealth of Virginia and seeks a declaration of the rights and obligations of the parties under the Virginia Horse Racing and Pari-Mutuel Wagering Act. The complaint also seeks injunctive relief enjoining us from conducting ADW operations in Virginia until we contract with the plaintiffs and obtain a license under the Virginia statute and regulations. We disagree with the complaint allegations and intend to fully and vigorously defend the lawsuit. We continue to accept wagers from Virginia residents.

Other Developments

On October 4, 2007, a search warrant issued by the U.S. District Court for the Central District of California was served on our company headquarters in Woodland Hills, California, by special agents for U.S. Immigration and Customs Enforcement, an agency under the U.S. Department of Homeland Security, for various records including, among other things, business records of our IRG business related to the wagering activities of certain customers. The investigation is being run by the U.S. Attorney's Office in Las Vegas, Nevada. At this point, we understand that the company is not a target of the investigation. We are cooperating with the U.S. government in their investigation.