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  1. #1
    gordonprice1947 is offline Public Member
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    Default BetOnSports Pleads Guilty to Racketeering

    I noticed no one has reported this yet here so let me be the first. BetOnSports today pleaded guilty to racketeering while making a deal with the US Attorney to have no further charges pursued if they agreed to give up information on their founder Gary Kaplan.

    http://www.casinogamblingweb.com/gam...lty_46258.html

  2. #2
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    But just to be clear ...

    In this case "racketeering" means :

    - Posting Sports Lines
    - Accepting Sports Bets.
    - Paying Customers (including US Customers) Efficiently and On Time.

    There is no suggestion of fraud, or crime, or anything that is illegal OUTSIDE of the USA.

    Am I right?

  3. #3
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    Here's a link to the US Attorney's press release ...

    Not surprising that Gary Kaplan is the main target, as he ran a betting operation on the streets of NYC and also operated from Miami for a time.

    Looks like Carruthers, who joined the group only after it had moved outside of the US and was an Internet operation, is also being sold up the river by the larger company.

    http://www.usdoj.gov/usao/moe/press%20releases/archived%20press%20releases/2007_press_releases/may/betonsports.html

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    Yes, BetOnSports has pleaded guilty to violating U.S. law. Unfortunately, U.S. case law when it comes to sports betting is very clear. Unless you are in Las Vegas, you simply can not place bets on sports. In this case, the racketeering conspiracy addresses BetOnSports violating the Wire Act to collect bets on sports and obscure whatever financial trail they might leave. They're also being accused of some sort of fraud, but snooptodd and I are still trying to sort that out in our reporting. Here's the fraud quote from the DOJ press release:

    Entities and individuals associated with BetonSports PLC also caused fraudulent promotional materials to be available to prospective and actual bettors
    As a person who likes to place the occasional sports bet in Vegas (and who can't get out there often), I don't like the sports betting laws in the U.S. But this is one area of gaming law that is clear. And if you look at all the recent UIGEA payment processor cases, the focus of all the investigations has been sports betting.

    We'll be talking with a gaming law attorney this morning to add some perspective to the story. And the story will be posted here as soon as it's done.

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    vinism's Avatar
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    Here's the story from snooptodd:

    BetonSports cops plea, agrees to testify against Kaplan and Carruthers

    BetonSports, an Internet sportsbook that stopped taking wagers in July 2006 after its former CEO David Carruthers was arrested in Dallas/Fort Worth International Aairport, has pleaded guilty to federal racketeering charges.

    “The government has pretty much said ‘All right, we’re done with the corporation,’” said Joseph Kelly, professor of Business Law at Buffalo State. “The corporation has been liquidated, so it’s not like they could go after anything there anyway. But now the other directors of the corporation don’t have to worry about future litigation and should be able to travel in the United States without fear of being arrested.”

    BetonSports has agreed to provide witnesses and evidence against Carruthers and company founder Gary Kaplan. In return, U.S. Attorney Catherine Hanaway will bring no further charges against any BetonSports executives.

    “This plea, combined with the terms of the civil junction, should put an end to the BetonSports illegal gambing empire,” Hanaway said in a statement. “This plea constitutes a submission by the company to the U.S. justice system.”

    The plea is an admission by BetonSports that it conducted an illegal gambling operation and laundered money. The company faces a fine and the plea agreement also requires BetonSports to repay U.S. account holders who have had money frozen for nearly a year.

    The announcement came just one day before Carruthers submitted a motion to dismiss his case based on a World Trade Organization ruling that the United States was violating its General Agreement on Trade and Services (GATS) commitments because it allows American companies to accept some kinds of Internet wagers – specifically on horse races and lotteries – while effectively blocking overseas competition for those same bets.

    The government will be able to file a response to the motion, and it could be several months before a decision is made on whether to proceed with the case or not.

    “I find it difficult to believe that (the federal magistrate) would say that she’ll throw out the case based on the WTO ruling,” Kelly said. “But I never would have expected her to ask for these motions on her own either, which is exactly what she did.”

    Kaplan ran illegal sports betting operations in New York and Miami before setting up BetonSports in Antigua and Costa Rica. Carruthers, who helped turn the company into a trusted, publicly listed brand, argued vociferously for of Internet gambling regulation in the United States and led BetonSports advertising efforts on American airwaves and in sports venues.

    “I always thought that Carruthers was a minor character in this,” Kelly said. “The real person they seem to be going after is Kaplan. But I think the liability (in both cases) seems to be open and shut. Everybody seems to be in agreement that sports betting is illegal.”
    Last edited by CityGuard; 25 May 2007 at 1:59 pm.

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    Here's another article about this: U.S. uses BetonSports as Pawn in Online Gambling Case
    A lot of the same information, but with some neat editorials, such as the last paragraph:
    The United States would like people to believe that all online gambling companies operate illegally like Betonsports has admitted in court. Like Enron all industries have criminals that make a bad name for others but in reality many offshore gambling companies are stand-up business men who operate legally outside the United States. The WTO has ruled that the U.S ban on internet gambling is illegal itself and it's believed that both Carruthers and Kaplan will use the WTO as part of the defense.
    Also, Betonsports admitted that they began as an illegal sports betting business, which took phone bets, in the early 1990s.

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    Quote Originally Posted by Fergie View Post
    Also, Betonsports admitted that they began as an illegal sports betting business, which took phone bets, in the early 1990s.
    The fact about illegal activity in the early 1990's should be completely disregarded. The statute of limitations has clearly run out on that criminal activity.

    I hope Carruthers and Kaplan fight the charges and don't plea out.
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    Quote Originally Posted by matted View Post
    I hope Carruthers and Kaplan fight the charges and don't plea out.
    According to an article in igamingnews, No Decision Reached Yet in Kaplan Detention Hearing, Kaplan was in possession of five passports from four countries at the time of his arrest in March in the Dominican Republic. including 2 passports with false names, and he is supposed to have admitted to bribery of certain authorities. I think this will be enough to criminalize him to such an extent that he will, sooner or later, plea guilty to come out of this mess.

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  9. #9
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    I think we will see very different trials for Kaplan and Carruthers.

    Kaplan has a criminal background as bookie. Running around the globe with forged passports doesn't help any.

    Carruthers is a more clean situation, with the only issue being that he provided free phone access to US citizens to place sports bets. This situation ties in more with whether non US companies can market to the US and free trade. There are a number of US companies marketing online gambling to non US citizens, such as Yahoo, Playboy and the Sands. The WTO decision will come to weigh in here, as will the attitude of the EU.

    Kaplan probably will stand a strictly criminal trial based on old infractions, while Carruthers will be much more of a political quagmire.

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