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BetonSports Updates

Law, 2006-07-22, by TwoGun

On Monday, David Carruthers, the CEO of BetonSports, a major internet sportsbook, was arrested by the United States Department of Justice. Carruthers, as well as eleven others were indicted on charges ranging from racketeering to tax evasion due to their involvement with BetonSports. While BetonSports is primarily a sportsbook that takes bets from the US, it also has a casino and a poker room.

Several developments have occurred since this story first headlined.

First, BetonSports has been hit by a temporary restraining order by an American judge. The restraining order directed BetonSports to cease taking bets from Americans, refund all monies in the accounts of Americans to the account holders, to set up a toll-free phone number so Americans can arrange to receive the money in their accounts, and to pay for a full page advertisement in a nationally-circulated newspaper saying that taking sports bets over the internet is illegal.

So far, BetonSports has shut down its website (essentially no longer takes bets from Americans), but has not complied with the other aspects of the temporary restraining order. A message posted on the BetonSports website reads:

"IN LIGHT OF COURT PAPERS FILED IN THE UNITED STATES, THE COMPANY HAS TEMPORARILY SUSPENDED THIS FACILITY PENDING ITS ABILITY TO ASSESS ITS FULL POSITION. DURING THIS PERIOD NO FINANCIAL OR WAGERING TRANSACTIONS CAN BE EXECUTED. FURTHER INFORMATION WILL BE POSTED ONCE THE COMPANY IS IN A POSITION TO DO SO."

Carruthers, the BetonSports CEO, is currently still being held in the United States and will likely not receive bail, since he is considered a flight risk. Carruthers is a British citizen working in Costa Rica. US authorities detained him while a flight he was on stopped over in Dallas.

Internet gambling stocks dropped sharply after the news hit. BetonSports stock had to be suspended, and some now consider the stock worthless. Sportingbet, another major internet sportsbook, has shed half of its market value. Stocks of igaming companies not offering sportsbooks, such as PartyGaming and 888, first dropped significantly, but then recovered.

The founder of BetonSports, Gary Kaplan, is considered a fugitive by the United States. He no longer lives in the United States but lives and works in Costa Rica. Costa Rica has so far refused to hand him over to US authorities since his business is considered legal there.

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