BetonSports.com CEO David Carruthers was arrested yesterday as he attempted to change planes in Dallas, enroute to Costa Rica from Britain. Charges against Carruthers, 10 other individuals and four companies include racketeering, conspiracy and fraud.
A main target of the indictments is not Carruthers, but BoS brain child Gary Kaplan, who had previously operated a sports betting operation out of New York. Among the charges against him are that he "failed to pay federal wagering excise taxes on more than $3.3 billion in wagers taken from the United States". This frankly leaves me scratching my head. How can someone be accountable for unpaid taxes when they had no mechanism for paying taxes? Ironically, Carruthers has being one of the biggest proponents of the formal legalization of Internet gambling in the USA, which would have included being lisensed and, um, paying taxes.
Trading was halted on BetOnSports PLC today following the mayhem surrounting the legal action taken by the Dept. of Justice. Share prices have tumbled for UK gambling giants PartyGaming and 888 following the legal procedings, among growing fears that this may be the first step in the United States aggressively pursuing offshore sportsbooks and casinos.
Technorati tag(s): betonsports, sports betting, gary kaplan
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