Suspends Online Wagering Operations

19 July 2006

BetonSports Plc has temporarily shut down its U.S. facing sports betting Web site in accordance with a Department of Justice (DOJ) restraining order. It has also temporarily suspended its U.S. customer service telephone line.

The U.S. Federal District Court for the Eastern District of Missouri issued the order Monday in conjunction with an indictment charging CEO David Carruthers and 10 others with conspiracy, fraud and racketeering in connection with illegal Internet gambling in the United States.

The order says BoS must cease offering bets to U.S. customers and refund all money to U.S. account holders.

"The company's board is considering its legal options with regard to the Order only insofar as it relates to the Company and the steps it needs to take in relation to the same," BoS said in a prepared statement.

BoS posted the following message on its Web site last night: "In light of court papers filed in the US, the company has temporarily suspended this facility pending its ability to assess its full position. During this period no financial or wagering transactions can be executed. Further information will be posted once the company is in a position to do so."

A company spokesman said its lawyers have 10 days to appeal the restraining order.

BoS also squelched overnight reports that an agreement had been reached with the DOJ.

"Neither the company nor lawyers acting on its behalf have reached any such agreement nor are they in negotiations with any other party to these proceedings," the company said.

Additional Developments

Tim Evans, an attorney for BoS CEO David Carruthers, said a bond hearing would be held Friday in Fort Worth to determine if Carruthers must remain in jail.

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Neil Scott Kaplan, younger brother of BoS founder Gary Kaplan, was arrested Monday by the FBI in Fort Pierce, Fla. in connection with the BoS indictment. The younger Kaplan, also known as Scott Kaye, was listed in the indictment as a BoS employee who handled the purchasing of goods and services. He is being held at a detention center in West Palm Beach and will appear in federal court today for a bond hearing. Prosecutors plan to extradite him and the others charged to St. Louis to stand trial.

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Meanwhile in, the Nation's capital, Rep. Bob Goodlatte, R-Va., congressional champion in the fight against Internet gambling in the U.S. and co-author of the Internet Gambling Prohibition and Enforcement Act, said he is satisfied with the actions of the DOJ. "We're very pleased that the Justice Department is taking action here with the laws they have available," Goodlatte said. "We join with them in trying to make it clear that the law covers all forms of gambling. It is quite clear that the Wire Act covers sports betting. But the Wire Act, because it was written in 1961, is not at all clear as to whether it covers other forms of gambling. Executives with other overseas gambling companies should take note of the prosecution."

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I-gaming stocks bounced back a bit today after the circulation of rumors that BoS had reached a deal with U.S. officials to resume business by the end of this week. PartyGaming helped boost the FTSE 100 by climbing as much as 10.8 percent in early trading, while 888 Holdings PLC rose 11.2 pct, and Sportingbet PLC jumped 18 percent. By end of trading, PartyGaming dropped back to 94.25p, still up 9 percent from Tuesday, with 888 at 177.75p (up 5.5 percent) and Sportingbet at 180.25p (down 0.96 percent). BoS shares were suspended on Tuesday and will most likely remain suspended through the trial, a BoS spokesperson said.

Emily Swoboda is the senior staff writer at IGamingNews. She lives in St. Louis, Mo.