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When I first read that David Carruthers was arrested in the United States I thought to myself about how those who are too vein often get bit on the ass. Then I realized as I started to write the article that I had David Carruthers confused with Calvin Arye (of BoDog.com fame, the ass with the female entourage). David Carruthers is actually not bad at all. In fact he's been writing lovely opinion-editorials for several papers over the past few years regarding Congress and their anti-internet gambling legislation. David Carruthers is the chief executive officer of the internet gambling group BETonSPORTS. He was in the United States only briefly, changing planes from England to Costa Rica, when he was detained by US authorities. He is now in custody in Fort Worth, Texas. A federal grand jury in the Eastern District of Missouri gave a 22-count indictment charging 11 individuals and four corporations on various charges of racketeering, conspiracy and fraud, the U.S. Department of Justice said in a statement. "While changing flights in the United States en route from the UK to Costa Rica, David Carruthers, chief executive of BETonSPORTS Plc was detained by U.S. federal authorities," the company said in a statement. "The board are currently seeking clarification as to the basis of the detention." it added. I don't see what they need clarified. Carruthers is the CEO of an online sportsbook. He should have known better than to set foot in the US, even if it was only the airport. His company takes money from US citizens via phone and internet. He can't even get away with no knowledge of the 1961 Wire Act. He's written too many articles debating why the industry should be regulated. There's no loophole for him to climb out of either, as BetonSports allows for bet placement via phone. "Illegal commercial gambling across state and international borders is a crime,'' Catherine Hanaway, U.S. attorney in St. Louis, said in a statement. ``Misuse of the Internet to violate the law can ultimately only serve to harm legitimate businesses.'' Going into the US when you know they are on a witch hunt for anyone in the internet gambling industry isn't the wisest of moves. But then, Carruthers lives in denial. Three days before the arrest he was quoted as saying "We continue to believe that the likelihood of the bill passing the Senate is remote." Perhaps there isn't much chance for HR 4777, but I think HR 4411 will make it through. Of course that won't actually do anything to hinder the industry, but that isn't the point. The 1961 Wire Act is fairly clear on its position regarding phone bets on sporting events. It's against it, period. This isn't a case of an internet casino which only takes bets via the internet which may not be totally legal but hasn't yet been made a racketeering felony either due to the fact that the internet was created well after 1961. Carruthers knew that his company was doing something illegal. He also knows that the United States Department of Justice has arrested and convicted someone else who owned a sports book and took bets from the US via phone. It was either vanity or stupidity which allowed him to land in the US, and as I doubt he's a stupid man I'm guessing it was the former. BetonSports is reacting quickly to the turn of events in an attempt to make trial easier for Carruthers. They have requested all of their advertisers to discontinue all marketing campaigns for up to 72 hours. They have also stopped taking bets via phone and on the internet as a "sign of good will". "On advice, without admitting the applicability or enforceability of the Temporary Restraining Order issued by the US Federal District Court in Missouri on 17 July 2006, the Company has put in hand steps to start to comply with that Order and to that end the Company confirms that it has temporarily discontinued the provision of its US facing sports betting services and has suspended certain US telephone line services specified in the Order." said a statement issued by BETonSPORTS earlier today. Gary Stephen Kaplan is the founder of BETonSPORTS.com and he's in hot water as well. With charges of 20 felony violations of federal laws and a warrant issued for his arrest Kaplan seems to have gone missing in action. My guess is he took the money and ran and will leave poor Carruthers holding the bag in the United States. I don't like how this makes the internet gambling industry look. This isn't an industry of criminals. It's an industry of business people (although some might argue that they are one in the same). This is an industry of people with the desire to provide entertainment to the masses who would rather place a bet at home. I'm not going overboard and saying that the industry is filled with saints. It isn't. But there is a big difference between a crook and your basic business owner. I suspect that Carruthers will get between two and five years in jail for this. Maybe less, as he's just the CEO and not the owner and the company has ceased to take bets from the US since his arrest. Players who like to bet on sports can probably kiss BetonSports goodbye. I don't see how the company will be able to continue without its US players. As it is they are losing £4m a day by being closed. Ninety percent of their business came from US players. That's over £3.5m a day. This is a huge loss for the company. Carruthers and Kaplan shouldn't have been doing something so blatantly illegal in the first place. However, since they decided to do something they knew is illegal then Carruthers should never have gone into the country that it was illegal in. That's just stupid. Enjoy your two to five Carruthers. I'm sure you'll have your millions waiting for you in some foreign bank account when you get out. Posted on: July 20, 2006
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