Reprinted from Caribbean Net News
caribbeannetnews.com

Antigua-based gaming company agrees to permanent ban on US business

Saturday, November 11, 2006

by: Andrew Harris and Benjamin Israel

USA (Bloomberg), ST LOUIS: Betonsports Plc, an Antigua-based Internet gambling firm under indictment and the subject of a US government lawsuit, has agreed to cease operations in the US to settle the civil litigation.

US District Judge Carol Jackson in St Louis federal court on Thursday approved the accord banning Betonsports. The company and 11 people, including founder Gary Kaplan and former Chief Executive Officer David Carruthers, still face charges of criminal racketeering related to illegal gambling.

"The defendant has no legally recognizable right to operate in the United States," Jackson wrote in the order.

Internet gambling, a $12 billion industry, violates federal laws against placing bets using a telephone or electronic means over state lines, prosecutors said. A new US law bars credit card companies from collecting payments for such transactions.

Betonsports' board of directors agreed to accept the injunction, "as it is seen as a major step in the negotiation to settle the outstanding criminal action," the company said in a statement.

Carruthers was arrested in July as he changed planes at a Dallas airport. He has been under house arrest in St. Louis since pleading not guilty July 31. Seven other defendants also pleaded not guilty. Gary Kaplan and two others haven't been apprehended.

Betonsports suspended trading of its shares on the London Stock Exchange on July 18 after US prosecutors unsealed the federal indictment demanding it forfeit $4.5 billion.

The company took in wagers in 2004 totaling $1.25 billion, 98 percent of which was sports bets placed by US gamblers using Betonsports' Web sites and US phone lines, Jackson said.

"The court's extensive findings of fact supporting the permanent injunction were based on the record of the firm's and its associates' criminal conduct," St Louis US Attorney Catherine Hanaway said in a statement on Thursday.

Betonsports didn't admit or deny her claims, Hanaway noted.

"The civil settlement actually means very little," Whittier Law School Professor Nelson Rose said. Rose, author of "Gambling and the Law," said Betonsports voluntarily suspended its US operations after the indictment was unsealed and that its business was already significantly eroded by the recent credit card processor legislation.

That law, he said, forced many Internet gambling businesses to reevaluate their positions in the US.

The British sports book Sportingbet Plc and three other online gambling companies said they were ceasing US operations after the law was passed.

Citing a provision in Jackson's order directing Betonsports to refund its clients' money, Rose said, "It looks like it's a win for the players," because the Justice Department appeared intent on claiming the funds as the proceeds of illegal gambling.

"There's just no way the government can find it's their money," Rose said.

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