Peter Dicks resigned as chairman of Sportingbet, the UK online gambling company, on Thursday, after a New York judge postponed a decision on Louisiana’s request for his extradition on illegal gambling charges.
Mr Dicks was given permission to return to the UK on condition that he returned to New York for a second hearing on September 28.
Sportingbet said it had accepted his resignation with “great reluctance”.
Shares in UK online gambling companies soared in response to the developments, amid rising hopes that Mr Dicks’ arrest was not part of a US-wide clampdown on online gambling.
Mr Dicks was arrested at JFK International Airport in New York last week on a warrant issued by the state of Louisiana, one of several US states that has laws prohibiting online gambling.
Officials in Louisiana said there was no connection between the cases but the arrests raised alarm among investors about the threat posed to online gambling companies by US anti-gambling laws.
A spokeswoman for the state of New York said a decision on Louisiana’s extradition request had been postponed to allow “a review of the legal arguments” surrounding the case.
She said an extradition warrant issued by George Pataki, governor of New York, had been withdrawn while the case was reviewed.
Mr Dicks made a 10-minute appearance in a New York county court to hear Judge Gene Lopez reschedule his extradition hearing.
Dressed smartly in a dark blue suit, he was given back his passport and granted permission to leave the US after his lawyer assured Judge Lopez that he would return for the rescheduled hearing.
Asked outside court whether he was pleased to be returning to the UK, Mr Dicks replied: “very”.
The 64 year-old spent a night in New York’s notorious Rikers Island jail following his arrest before being released on bail.
Sportingbet said Mr Dicks was stepping down to “concentrate on personal matters” and that a new independent non-executive chairman would be appointed shortly.
The company, which generates 65 per cent of its earnings in the US, vowed last week to continue accepting bets from US-based customers, in defiance of domestic laws against online gambling.
The US Senate is currently considering tightening anti-gambling laws enshrined in the 1961 Wire Act, which outlaws gambling by telephone, to create a stronger deterrent against online gambling.
Until Congress acts, the most immediate threat to foreign online gambling companies is posed by Louisiana and other states, including Michigan, Illinois, South Dakota, Oregon and Indiana, which have introduced their own laws against internet gambling.