Online Gambling Exec Detained In USA

Published: Monday, July 17, 2006 Online-Casinos.com

ONLINE GAMBLING EXEC DETAINED IN U.S.A.

BetOnSports chief delayed in transit

The week's news was off to a flying start Monday as reports appeared in the Telegraph that the high profile CEO of BetonSports, David Carruthers had been detained by US federal officials whilst in transit through the States on his way to Costa Rica. Carruthers is a British citizen and was travelling from the UK with his wife at the time.

A statement from the company released to the London Stock Exchange said it was "seeking clarification as to the basis of the detention" and a further announcement would be made when appropriate. The statement emphasised that the business continues to trade normally and that the Antigua-licenced gaming activities serviced in Costa Rica and Kuala Lumpur are operating as usual.

Shares in the i-gaming sector reacted negatively as the news hit the markets on Monday morning, with BetonSports suffering a drop at one point of over 20 percent. Sportingbet also fell over 10 percent while PartyGaming saw its share price fall 7.5 percent.

Analysts were at a loss to explain the developments. One suggested it was strange such a move should be made before any further legislation should have been made law. Another suggested the US Department of Justice might have a "beef" with BetonSports for "lots of reasons; telephone betting, advertising, the founder."

Carruthers has been a high-profile and outspoken proponent of the regulation of online gambling in the USA rather than prohibition, and was recently quoted as being confident that current moves to ban the industry would fail once the proposals reached the Senate.

BetOnSports is based offshore to prevent it from violating US gambling laws, though it does take bets from US citizens.

Last week the US House of Representatives passed HR 4411, the Internet Gambling Prohibition Act. The bill proposes a further crackdown on internet gambling, and has now been passed to the Senate. To become law, it must be passed by the Senate, where a backlog of legislation means it may never be debated.