The headline reads "Bodog CEO unfazed by arrest of British gaming boss". On Wednesday July 19th the Vancouver Sun published an article all about Calvin Ayre and the Bodog conference scheduled for Las Vegas. Apparently Ayre was not bothered by David Carruthers being arrested while on a layover in the United States.

Calvin Ayre is the owner and founder of bodog.com an internet gambling company which gets the bulk of its clientele from the United States. Ayre lives in Costa Rica and is a Canadian citizen. He owns a media company in Vancouver and splits his time between there and San Jose. Ayre doesn't come into the United States that often, but he didn't see how the US could be bothered with him according to an interview he gave Forbes back in March.

I guess being a billionaire the man thinks he can get away with anything. Ayre was featured on the cover of Forbes as one of the world's 793 billionaires. In the article "Catch me if you can" he bragged about his business and how the US couldn't touch him. What he needs to realize that as a billionaire he will be targeted for everything.

Then FBI agents arrested David Carruthers, chief executive officer of BetonSports Plc. Carruthers was one of eleven people and four companies that were indicted by a federal grand jury in the Eastern District of Missouri on 22 counts of racketeering, conspiracy and fraud. The founder of BetonSports, Gary Kaplan, is also charged. If Kaplan is caught by the US he'll be doing some serious time. The IRS want him. He's charged with having his employees take bets from undercover agents from the US, and failing to pay excise taxes on $3.3 billion in wagers taken from U.S. residents. The Justice Department also seeks forfeiture of $4.5 billion and various properties from Kaplan and his co-defendants.

What I love about this is the fact that even though internet gambling is illegal in the US companies are still obligated to pay excise tax. How brilliant is that? Uncle Sam even profits on illegal business.

Ayre wasn't on the wanted list by the department of justice. I searched their site and found the announcement pertaining to who they are looking for. Kaplan was the main target.

"Other defendants in the racketeering conspiracy include: Kaplan’s siblings, Neil Scott Kaplan and Lori Kaplan Multz; Norman Steinberg; David Carruthers, chief executive officer of BetonSports.com; Peter Wilson, media director for BetonSports.com; and Tim Brown, Steinberg’s son-in-law. The three other charged companies, all Florida-based, were Direct Mail Expertise, Inc., DME Global Marketing and Fulfillment Inc. and Mobile Promotions Inc. Also charged are William Hernan Lenis; Monica Lenis and Manny Gustavo Lenis, owners and operators of the Florida companies; and William Hernan Lenis’ son, William Luis Lenis.

“Illegal commercial gambling across state and international borders is a crime,” said U.S Attorney Catherine L. Hanaway of the Eastern District of Missouri. “Misuse of the Internet to violate the law can ultimately only serve to harm legitimate businesses. This indictment is but one step in a series of actions designed to punish and seize the profits of individuals who disregard federal and state laws.”"

Ayre, true to his reputation, was unfazed by the charges and arrest and even made a statement about it.

"At this point, the detention of a high-profile senior executive in the online gaming industry may appear to some as ominous for the online gambling industry, but that is not the case at all," he said in a release.

"The charges are specific to the person and company at issue, and have nothing to do with Bodog.com's current or previous business practices. Bodog.com, a privately held, Costa Rican-based company, has an innovative and different business model that allows us to run our entertainment enterprise within the laws set out in each of the jurisdictions where we conduct our business."

In other words Bodog.com doesn’t take bets via phone. BetonSports did. The 1961 Wire Act clearly states that sports' betting via telephone is a no-no. On the other hand, the internet didn't exist in 1961 so the legalities regarding that is not totally clear.

"Our organization is quite confident the U.S. government's actions will have no impact on our operations," Ayre added.

Ayre intended on putting his money where his mouth was next week at Bodog's second annual Internet gaming marketing conference at the Wynn Las Vegas hotel. Magic Johnson was to be the keynote speaker and Ayre, described himself in the self-congratulatory promotional material as "the personification of the new American dream: as an online entrepreneur, jetsetter, industry leader, producer and philanthropist." I've said it before and I'll say it again, the man is a putz (Ayre that is.)

I'm assuming Ayre's brain then kicked in. They may not be able to get him on racketeering due to an internet technicality, but my guess is he hasn't paid his excise tax and his company definitely takes bets from US citizens on US soil.

Bodog issued the following in a press release: "The Bodog.com Marketing Conference presents a wonderful opportunity for good discussion about marketing, customer service and about the growth of our industry; however, in the last few days, many of you who planned to attend the conference have expressed a high level of concern over the uncertainty surrounding the U.S. government's recent actions against one of the companies in our industry. It is in light of these concerns that we have decided to postpone the Bodog.com Marketing Conference to a later date and at an international location. This decision ensures that the focus of the conference will not be lost."

"I apologize for any inconvenience this has caused you, but in spite of what has happened of late we chose to act with your best interests in mind. I assure you that we will make it up to you with a bigger and better conference to be announced in the near future," they added.

I'm guessing that the only people who would be going to a bodog conference would be affiliate marketers of bodog or those who want to affiliate with bodog. Affiliates aren't in the radar of the US department of justice (and would only be in trouble if they live in Washington state). As such this change of tone is probably due to fear in the heart of Ayre.

The change of tone is a wise one. If Ayre thinks that the IRS won't try to get their man through hell and high water then he should go talk to Al Capone, another gentleman in the gambling trade who didn't feel the need to pay his duty.

Posted on: July 20, 2006

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