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BetOnSports CEO sentenced to prison

DAVID CARRUTHERS, former chief executive of BetOnSports, was on Friday sentenced to 33 months in prison and fined $75,000 after pleading guilty to a racketeering conspiracy charge.

David Carruthers

David Carruthers: prison sentence

Carruthers, 52, had been under house arrest in St Louis, Missouri, since being taken into custody at Dallas-Fort Worth airport in July 2006, when en route from Britain to BetOnSports' operational headquarters in Costa Rica.

Carruthers' sentence, imposed at a hearing before US District Judge Carol Jackson, followed that of Gary Kaplan, BetOnSports founder, in November, when Kaplan was sentenced to 51 months in prison and forfeited $43.65 million.

Last month, the company was fined $28.2m for similar racketeering conspiracy charges, which stemmed from BetOnSports encouragement and acceptance of online and telephone sports bets from bettors resident in the US.

Founded in 1995, BetOnSports advertised its services in the US and, by 2004, had 1,700 employees in Costa Rica, servicing almost one million customers, almost all of whom were resident in the US.

That year, BetOnSports was floated on London's Alternative Investment Market and, by 2006, had a turnover of over $1.7 billion and an operating profit of $20m.

Following Carruthers' arrest, the company's shares were suspended and BetOnSports stopped accepting bets from the US.

Prior to his arrest, Carruthers was a vocal advocate of a change in the US approach to online sports betting, urging that it be legitimised and properly licensed, regulated and taxed.

It was alleged that legal opinions presented to the company in 2002 indicated that Carruthers and other executives were aware that their operation might be breaching US law.

Judge Jackson, sentencing Carruthers, said: "I'm sorry that the respect that you now have for US laws didn't come sooner."

After Carruthers' arrest, UK based betting companies further distanced themselves from the US market. The case highlighted the different legal position inthe US and a difference in attitudes to sports betting, which are generally more hostile and less liberal than in the UK.

 
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