US continues legal action against British gambling firm

US government lawyers say they will continue prosecuting BetOnSports, even though the British-based internet gambling company is shutting down its operations that take bets from American customers.

Meanwhile US Attorney Catherine Hanaway’s office approved conditions for the release of London-based BetOnSports’ former chief executive David Carruthers, according to his lawyer, Scott Rosenblum.

Hanaway’s case against BetOnSports is one of the most high-profile prosecutions of online gambling. Last month, her office unveiled a 22-count indictment against the company.

It seeks a £2.5bn (€3.7bn) forfeiture from Carruthers and 10 other people associated with the operation that the government claims fraudulently took bets from US residents by phone and the internet, and failed to pay excise taxes.

Carruthers was arrested last month during a stopover in Texas and should be released within days. Rosenblum said prosecutors were waiting for £560,000 (€832,197) in bail money to be wired to St Louis, Missouri, before his release. The large wire transfer was delayed by technical complications yesterday but should arrive no later than Monday, he said.

Hanaway told The Associated Press her prosecution would not be affected by BetOnSports’ decision to close its offices in Costa Rica and its Antigua offices that processed billions of dollars worth of bets placed from the United States.

“It’s always good when people quit committing crime, but that doesn’t release them from the criminal or civil liability from the crimes they’ve already done,” she said.

The closure would have little effect on the government’s case, said Nelson Rose, a professor at Whittier College of Law and an expert on internet gambling.

“It’s like robbing a bank and on the way out you change your mind – which does happen – you can’t give the money back” and avoid prosecution, Rose said.

Carruthers was arrested as he flew from London to Costa Rica. His lawyers have been negotiating with Hanaway’s office over the technical terms of his release since a bail hearing on July 31.

Yesterday Rosenblum met prosecutors in the chambers of US Judge Mary Ann Medler. He said all parties agreed on the terms of Carruthers’ release, which will require him to stay in the St Louis area under electronic monitoring until his trial on racketeering and fraud charges.

BetOnSports spokesman Kevin Smith said the company would lay off about 800 workers in Costa Rica and Antigua. He said the company would remain in business although it would no longer take any bets from the US.

Smith said the company would focus on customers in Asia and South America, which together accounted for about 20% of BetOnSports’ total revenue before the indictment.

But Wayne Brown, an analyst at Altium, said the decision was the “worst case scenario” that effectively spelled the end of the company, which currently generates almost three-quarters of its business in the US.