Mr Dicks rang his wife to tell her the good news

Mr Dicks had been fighting extradition to Louisiana, where he still faces charges of illegal computer gambling.

The arrest was seen as part of a crackdown on internet gambling, which is still illegal in the US.

The former head of another firm, the UK-based Betonsports is on bail, in the US after his arrest in Texas in July.

One of Mr Dicks' lawyers said that New York Governor George Pataki had refused to sign the order extraditing him to Louisiana to face the charges.

Mr Dicks is now free to return to the UK.

Money laundering fears

Analysts say the legal action against the two gaming firm bosses is part of a campaign by US authorities to make online gambling illegal in the country under the 1961 Wire Act.

They say internet betting sites can be used to launder money and do not adequately screen out underage gamblers or addicts.

The subject has been a grey area, as gambling is illegal in many parts of the US and it remains unclear to what extent the Wire Act covers online gambling.

Many firms in the $12bn online gaming industry have hundreds of thousands of US customers - but consider themselves immune from US laws because they are based offshore in countries that allow gambling.

Earlier this month, UK bookmaker William Hill has said it had stopped taking casino and poker bets online from US customers.