David Carruthers, CEO for BetonSports, was arrested earlier this week by the FBI for illegal gambling. This is all part of their efforts to stamp out online gambling in the United States. To me this just seems daff. Now I’m not a fan of gambling period, but to think that they can shut down a billion dollar industry just doesn’t make sense to me. Provided the participants are of legal age and are using their own funds willingly, I have no problem with vendors like BetonSports, providing the service. This crusade smacks of prohibition and we all know how successful that campaign was. Personally, I think the government needs to figure out how to get their share of the revenue and move on. It too late to turn the clock back when it comes to online gambling.
BetonSports chief faces US charges of racketeering
By Roger Blitz in London and Alexander Kliment in Washington
Financial Times, Published: July 18 2006 03:00 | Last updated: July 18 2006 03:00
A US grand jury last night filed charges against 11 individuals and four corporations, including BetonSports, its founder, chief executive and media director alleging racketeering and conspiracy.
The charges, arising from a joint investigation involving the FBI, centred on what US attorney Catherine Hanaway said was: “Illegal commercial gambling across state and international borders.”
The charges followed the detention earlier in the day of David Carruthers, chief executive of BetonSports, while en route from London to Costa Rica.
Shares in the sector dived after Mr Carruthers was held as he changed aircraft at Dallas airport. He was travelling back to Costa Rica where his company is based.
Among those charged were Gary Kaplan, founder of BetonSports, Mr Carruthers and Peter Wilson, the media director for BetonSports.
BetonSports said yesterday it had been unable to speak to the chief executive since he was approached on Sunday night by federal authorities.
Industry shares had fallen during the day amid fears that Mr Carruthers’ detention could be linked to efforts by US politicians to outlaw online gaming. The House of Representatives passed an anti-gaming bill on Tuesday last week.
Mr Carruthers is a prominent lobbyist against the legislation and wants the US to adopt a properly regulated system.
Shares in BetonSports were down 16.7 per cent to 122½p, while SportingBet, another company with a heavy dependence on the US market, fell 13 per cent to 282p. PartyGaming fell 5.5 per cent to 103p.
Asked if Mr Carruthers had raised issues about visiting the US, Clive Parritt, the BetonSports chairman, said: “Hadwe conjectured that there would be difficulties? Of course. Had we made a plan? Not really.”
Mr Parritt said the company had not anticipated the chief executive’s detention.
“He has been quite high profile and been in and out of the US quite a number of times in years and was promoting legalised gambling,” he said.
Mr Carruthers told shareholders at the company’s annual meeting on Friday that the chances of the Senate passing the anti-gaming bill into law were “remote”.
He also said the debate on internet gambling was moving in the industry’s favour, and that he thought improved transparency would lead to legislation for a regulatory system in three to five years.
Copyright The Financial Times Limited 2006