BetonSports Still Stiffing U.S. Bettors
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U.S. gamblers holding accounts with BetonSports, the beleaguered London-based online betting site, are not likely to see their money any time soon.
The site shut down its U.S. operations earlier this month in the aftermath of a 22-count indictment charging BetonSports and 11 individuals with racketeering, conspiracy and fraud, including failing to pay federal wagering excise taxes on more than $3.3 billion in wagers taken from U.S. bettors.
BetonSports is also under a court order to return any balances in accounts held by U.S. bettors -- one of the many and complex legal issues facing the company.
"We are not making payments right now," J.P. Masters, who is working a U.S. telephone response line for the company, told internetnews.com. "All of our accounts are frozen right now. We have no time frame for returning any money."
How many U.S. bettors affected by the order is unknown.
"The case is under investigation so that information is not going to be revealed right now," a spokesman for the U.S. District Court for the Eastern District of Missouri, said Monday.
According to the Department of Justice (DoJ) indictment, BetonSports in 2003 had 100,000 active players who placed 33 million wagers worth $1.6 billion through the company's Web sites.
The next court action facing BetonSports is Thursday, when U.S. District Judge Carol E. Jackson will consider extending the temporary restraining order (TRO) against BetonSports that expires on Friday.
The TRO requires BetonSports to return "all funds in its possession received from persons in the United States for the purpose of opening a sports betting wagering account."
The DoJ contends BetonSports violated U.S. law by taking sporting bets over the telephone and the Internet from U.S. citizens.
Under U.S. law, the Wire Act prohibits making gambling wagers over the telephone. Approved by Congress in the 1960s, the legislation did not anticipate the Internet, creating a legal gray area for online gambling.
The DoJ maintains the Wire Act also covers placing bets over the Internet. In July, the U.S. House Representatives passed a bill extending the Wire Act to all forms of online gambling.
Former BetonSports CEO David Carruthers was freed two weeks ago on $1 million bond and an e-bracelet. His movement is restricted to St. Louis, where he awaits trial.
Carruthers was arrested in July while en route from England to Costa Rica, where BetonSports maintains extensive operations.
A week later, BetonSports fired Carruthers.
BetonSports founder Gary Kaplan remains at large, variously reported in Spain, Israel, Costa Rica, Zimbabwe and points north and south.
According to the DoJ, Kaplan launched his gambling business through a sports book in New York City in the early 1990s. After he was arrested on New York gambling charges in 1993, Kaplan moved his operation to Florida and finally offshore to Costa Rica.
He sold his company in the early 2000s to the English company that took it public in 2004.
BetonSports saw its stock suspended the two days after Carruthers' arrest.