Science & Technology

Gambling Crackdown

Have Ban, Will Travel


They supposedly speak English in England, but they have different names for certain things. When they say lift, they mean elevator. Lorry is their word for truck. And someone they call a businessman is what we call a racketeer.

David Carruthers, CEO of the online bookmaker BetOnSports, discovered the significance of that difference during a July layover at the Dallas/Fort Worth airport, where he was arrested for helping Americans gamble. His arrest is part of a larger attempt to impose America's gambling restrictions on countries with more tolerant policies.

Carruthers was on his way from London, where BetOn¬Sports is headquartered, to Costa Rica, where its online betting operations are based. The business is legal in both places, but not in the United States. Since most of its customers are Americans, Carruthers is guilty of about 20 different felonies—or so say the FBI and the Justice Department, and they're the ones with the guns and handcuffs.

In addition to Carruthers, the U.S. attorney for the Eastern District of Missouri accuses 10 other people associated with BetOnSports of violating the 1961 Wire Act, which prohibits using "a wire communication facility" to accept bets on "any sporting event or contest." Leaving aside the question of whether the Internet counts as a "wire communication facility," online bookmakers in other countries argue that the U.S. prohibition does not apply to them simply because some of their customers are Americans. If a betting operation is based in Costa Rica, they say, that's where the betting takes place, even if the customer uses a computer in St. Louis.

While a Wire Act violation carries a maximum penalty of two years in prison, a "racketeering conspiracy" involving such a violation can be punished by a prison term of up to 20 years. So can "mail fraud," which BetOnSports supposedly committed by advertising that it is "legal and licensed"—never mind that BetOnSports is legal and licensed in the countries where it operates.

Despite the talk of fraud, BetOnSports is not accused of ripping off its customers. This case has nothing to do with consumer protection, except in the sense of protecting consumers from their own desire to bet on sports.