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Antigua seeks restraining order against online gambling firm

December 1, 2006

The Antiguan government has taken measures to stop the sale of Antigua-registered online gambling businesses.

The Financial Services Regulatory Commission (FSRC) of Antigua and Barbuda yesterday said that it had sought a Court injunction against BETonSPORTS (Antigua) Ltd.

BETonSPORTS (Antigua) Ltd., an interactive gaming and interactive wagering service provider, under the order is restrained from, among other things, entering into any agreement or arrangement to sell, transfer or otherwise dispose of cash and assets within or outside of Antigua and Barbuda without the consent, management and supervision of FSRC.

The application also calls for BETonSPORTS to account for its assets and obligations and otherwise provide such information that will assist the FSRC in ensuring that BETonSPORTS consumers are protected to the maximum extent possible and that Antigua and Barbuda's Laws and Regulations are adhered to effect the orderly closure of BETonSPORTS US facing operations, according to a release from the office of the Prime Minister.

The application for the order comes on the heels of an announced settlement between the United States government and BETonSPORTS and its affiliates pertaining to criminal and civil charges levelled against the company by United States authorities earlier in the year. These charges, which resulted in the high-profile arrest of BETonSPORTS former Chief Executive, led to wide-spread disruption throughout the International on-line gaming community and represented a new assault on cross-border competition for gambling and betting services by the United States government.

Kaye McDonald, the Director of Gaming for the FSRC, observed "while the jurisdiction of the United States government over BETonSPORTS is questionable, by virtue of being the holder of an Interactive Gaming and Interactive Wagering license issued by the Antiguan and Barbudan authorities, BETonSPORTS has acquiesced to our International jurisdiction over the company and its assets. It is important for the protection of consumers that whatever assets BETonSPORTS has remaining be properly available to depositors and other creditors and not be dissipated on fines or penalties or otherwise improperly disposed."

Mr. Lebrecht Hesse, the Chairman of the FSRC stated that "we believe that the United States should step aside and ensure that our regulators can enforce and oversee the application of the laws of Antigua and Barbuda to the orderly dissolution of BETonSPORTS. We are disappointed that the United States efforts to prohibit cross-border competition in gambling and betting services have led to the disruption of a once-healthy and robust service provider, but we are just as adamant that our jurisdiction be respected in the interests of consumers and others."

A hearing of the application is scheduled for 4th December 2006, at which time BETonSPORTS will have the opportunity to respond to the application for a restraining order.

Antigua and Barbuda, a small, twin-island nation-state in the Eastern Caribbean, has long been a leader in the development, regulation and oversight of the burgeoning on-line gaming sector. In 2005, it obtained a decision for the World Trade Organisation (WTO) in its favour, ruling that United States efforts to prohibit the provision of gambling and betting services to consumers in the United States violated American free-trade commitments under the WTO's General Agreement on Trade in Services. Antigua and Barbuda is engaged in further tribunal proceedings with the United States at the WTO to determine whether the United States is in compliance with the ruling.

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