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.

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