Betting website founder pleads guilty

The founder of the online gambling site BetOnSports.com pleaded guilty to US federal racketeering conspiracy and other charges, concluding years of investigating and prosecuting a case in the complex world of offshore sports gambling.

Gary Kaplan, 50, who started out as a New York bookie who didn’t complete high school, and who in recent years held his business out to the world as the largest and best in the industry, agreed in a plea deal to forfeit $43.6m (€30.5m) in illegally obtained revenue from his criminal enterprise.

Assistant US Attorney Steven Holtshouser said Kaplan won’t be left penniless.

The money, most of which will go to the US government, already has arrived from a Swiss bank account, and represents “more than half” of Kaplan’s total worth, Holtshouser said.

Some of the proceeds may go to New Jersey and Switzerland for their cooperation in the case.

He said Kaplan has a trust “with many millions” in New Jersey and Switzerland.

Kaplan founded the offshore company in 1995, setting up entities in Aruba, Antigua and eventually Costa Rica to solicit US citizens to place sports wagers by phone and over the internet directly from their US accounts.

It grew to be one of the largest online gambling firms in the world.

By Kaplan’s own admission in court, BetOnSports had a million registered customers and accepted more than 10m sports bets in excess of a billion dollars in 2004 alone.

By then, he was based in Costa Rica, where he employed 1,700 people and provided a day care centre for their children that was next to his firing range, Mr Holtshouser said.

Kaplan took BetOnSports public on the London Stock Exchange’s Alternative Investment Market in 2004, which netted him more than $100m (€69.96m) that was invested in Swiss bank accounts.

For the next two years, he served as BetOnSports’ consultant.

Online gaming is illegal in the US, and in 2006, a federal grand jury indicted Kaplan, his company and several associates. Four other former executives, including two of Kaplan’s siblings, have pleaded guilty. No one has been sentenced.

“I accept responsibility for my actions and I realise that as a US citizen, I should have abided by US law,” Kaplan said.

“Nevertheless, I do not agree with the US stance against offshore telephone and internet sports betting. But I do accept full responsibility for my decisions.”

Kaplan pleaded guilty to racketeering conspiracy, violating the Wire Wager Act, and conspiring to violate it. In exchange, other charges were dropped.

Defence and prosecuting attorneys are recommending he serve anywhere from 41 to 51 months in prison, but Judge Jackson could impose more or less at Kaplan’s sentencing October 27.

He has already served 29 months in jail since his March 2007 arrest in Puerto Rico.