11/30/2007 12:00AM

Champion resigns from Youbet

EmailCharles Champion, the chief executive of Youbet.com since 2002, stepped down from his position at the online horseracing and broadcast company on Friday and will leave the company effective Dec. 11, Youbet announced on Friday.

Champion, 53, is stepping down at a time when customers of Youbet’s wholly owned offshore rebate shop, International Racing Group, are under investigation by the U.S. Department of Immigration and Customs Enforcement. In addition, Youbet’s stock has recently been trading at its lowest point in five years, in part because of the investigation and in part because of investor uncertainty over the continuing role of third-party companies in account wagering.

In a release, Youbet said that Champion was stepping down “to pursue other opportunities.” Champion did not immediately return a phone call on Friday. Gary Sproule, the company’s chief financial officer, will serve as the company’s interim chief executive while the company conducts a search.

When Champion took over Youbet in May 2002, the company was nearly bankrupt and going through $500,000 in cash each month. Under Champion, Youbet grew into one of the leading account-wagering companies in the U.S., with handle growing from $163 million in 2002 to $464 million in 2006.

Still, Youbet has never been a highly profitable company, and its handle growth mirrored that of the handle seen by almost all other account-wagering companies. Account wagering is the only current growing segment of the parimutuel market.

Champion also oversaw Youbet’s acquisition of United Tote, a bet-processing company, and the purchase of IRG, which raised eyebrows in the racing industry because of the timing of the acquisition. At the time, IRG had recently been named in a federal indictment that charged nearly two dozen people with running an illegal gambling operation through IRG and other offshore rebate shops, though IRG was never charged with a crime.

Youbet’s stock has plummeted over the past three months, hitting a one-year low of 74 cents in mid-November. The stock began its slide with the announcement of the customs investigation in October, but investors have also been lukewarm to the stock because of the entry of Churchill Downs Inc. into the account-wagering market earlier this year. As a result of that development, Youbet.com lost access to several high-profile racing signals.