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Indicted gaming company fires CEO

By Patricia Campbell
July 26, 2006

A week after locally licensed Internet gaming company BetonSports was hit with the indictment of both its founder and its chief executive officer on racketeering charges, the company has announced that it has sacked arrested CEO David Carruthers.

In a statement released by BetonSports yesterday, it announced that it had terminated “the contract under which David Carruthers acted as CEO of the company” following his arrest in Texas last week Sunday on charges related to racketeering, tax evasion, conspiracy and fraud. Carruthers was arrested while trying to make a connecting flight from the United Kingdom to Costa Rica.

Similar charges have also been laid against company founder Gary Caplan, who is resident in Costa Rica, where BetonSports bases the bulk of its gaming operations. Caplan is now considered a fugitive by US authorities.

Explaining the decision to fire Carruthers, the BetonSports statement said he was clearly unable to perform his duties while he remained in the custody of the US government. The company also said it has been unable to speak directly with Carruthers.

The charges against the BetonSports principals sparked serious concerns in Antigua & Barbuda’s already beleaguered gaming industry that the US had begun a promised crackdown on Internet gambling.

The charges, following so closely after indictments against a different gaming company were unsealed, created a financial backlash as stocks in publicly traded gaming companies fell sharply last week.

Most of these stocks have seen some recovery since then, as the industry public relations machinery kicked in with repeated declarations that the BetonSports charges were specific to that company.

Antigua & Barbuda’s gaming officials have been notably silent on Carruthers’ arrest and the charges affecting the Caplan, but the country’s attorney at the World trade Organisation, Mark Mendel, has been quoted in an interview with Eye on Gambling (EOG) expressing the opinion that the BetonSports indictments could indeed be an isolated event.

EOG is a gambling information portal which provides news and editorial commentary on issues related to the industry.

Asked whether he thought further indictments from the US government were forthcoming, Mendel said while attempting to predict the motivations of the US Department of Justice was “a bit of a gamble in itself” the BetonSports indictments “may just be an isolated event.

“Most of the activity referenced in the indictment dates back to the 2002-2003 time frame when BetonSports was the most prominent offshore gaming presence in the US through advertising and aggressive promotion. Also, the federal prosecutors in Missouri have been particularly loud sabre-rattlers with respect to cross-border gaming in recent years….”

At the same time, Mendel noted that the decision to unseal the indictments against the gaming company, at this time, was “curious, and perhaps related to the increased attention in the Congress to cross-border gambling.”

Source: Antigua Sun

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