RealTime IT News

BetonSports Fires Jailed CEO

Perhaps it's only fitting David Carruthers is sitting in a Texas jail since his life is turning into a country and western song.

A little more than a week ago, Fort Worth officials detained Carruthers, the CEO of online British oddsmaker BetonSports plc, on a number of U.S. related gambling charges.

Tuesday, he was fired.

"This action was taken as a consequence of Mr. Carruthers continued detention by U.S. authorities," BetonSports said in a statement.

"Clearly, while he remains in the custody of the U.S. government he is unable to perform his duties. Further the company has been unable to speak directly with Mr. Carruthers."

Carruthers, BetonSports and 10 others, including BetonSports founder Gary Kaplan, were named in a 22-count federal indictment earlier this month.

The Department of Justice (DoJ) contends BetonSports violated U.S. law by taking sporting bets over the telephone and the Internet from U.S. citizens.

Carruthers is the only person named in the indictment under detention, having been grabbed by U.S. authorities July 16 while he was changing planes in Fort Worth en route from London to Costa Rica, where BetonSports maintains online casino operations.

Public trading was suspended in BetonSports two days after Carruthers was arrested.

Under a U.S. order, BetonSports, one of the world's largest Internet gambling operations, also cut off U.S. connections to its various offshore gambling sites.

"In light of court papers filed in the United States, the company has temporarily suspended this facility pending its ability to assess its full position," the BetonSports commercial site states.

"During this period no financial or wagering transactions can be executed."

The company also issued another statement distancing itself from company founder Kaplan.

BetonSports said it wanted to make "absolutely clear that none of the founders of the original business has any continuing role within the company…the original founder has a consulting agreement with the company under which his role is non-management."

In the statement, the company stressed the allegations contained in the U.S. indictment occurred prior to the time BetonSports went public on the London Stock Exchange in 2004.

According to the DoJ, BetonSports in 2003 had 100,000 active players who placed 33 million wagers worth $1.6 billion through the company's Web sites. More than half of those wagers came from Americans.

All these allegations relate to the time prior to the acquisition of the business by the company and its July 2004 float," the company said.

"The board wants to assure the investment community, employees, and customers of the company that they, in consultation with the company's attorneys, are evaluating all of the company's options and deciding what steps will be taken next."

Carruthers, meanwhile, was last seen Friday at a bail hearing wearing an orange jumpsuit and shackles.

Carruthers' attorneys did not seek bail, instead requesting Carruthers be transferred to St. Louis, where the federal indictment was issued.

A week before Carruthers' detention, the U.S. House of Representatives overwhelmingly approved legislation aimed at cutting off access to offshore casinos to Americans.

The bill would force banks and credit card companies to refuse payments to the estimated 2,300 gambling sites located outside of U.S. jurisdiction.

The Unlawful Internet Gambling Enforcement Act of 2006 H.R. 4411 also updates the 1961 Wire Act, which currently outlaws sports wagering over the telephone, to cover all forms of online gambling from sports wagering to poker sites.

The bill exempts state-sanctioned online gambling on horse racing and lotteries.