Death Sentence for BetOnSports

This happened last week, but I missed it, and maybe you did too: The British online gambling company BetOnSports has pleaded guilty to federal racketeering charges. Although sentencing, which could include fines and/or forfeitures, is scheduled for October, the company already has received the death penalty, since it will cease to exist as a result of the U.S. government's crackdown on Internet wagering. BetOnSports founder Stephen Kaplan and CEO David Carruthers still face prosecution.

Since the Wire Act clearly covers sports betting, the company's main defense was that it did not operate in the U.S. and therefore was not subject to U.S. jurisdiction. A.P. reports that "BetOnSports had refused to send attorneys to criminal hearings in St. Louis federal court, claiming that [U.S. Attorney Catherine] Hanaway had no authority to charge the foreign company, which took a majority of its bets from U.S. customers but processed the wagers in Costa Rica and elsewhere." Under this theory, the placing of the bets, which is not prohibited by federal law, occurs in the U.S., but the accepting of the bets happens in Costa Rica, where it is perfectly legal. I rather like this theory, but I doubt Kaplan and Carruthers will have much success with it.