Online Gambling

Death Sentence for BetOnSports

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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.

NEXT: Friday Funnies

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  1. So the Le Petomaine Hospital for the Insane Gambler lost funding?

    Had the Gov joined the ZOD campaign, his future would have been secure.

    Pity.

  2. The government’s overzealous prosecution and crackpot theory in this case makes the recent ACLU vs. Boeing post look reasonable.

  3. (but Guy – you forgot to give the Governor a “hrumph”)

  4. So I’m guessing the equally-subtly-named Sportsbook.com probably isn’t the best place to put my $$$ right now…

  5. On behalf of all the legal British businesses that purvey items which may offend delicate American sensibilities, I would like to extend my deepest apologies for our attempt at providing you with safe, regulated services.

  6. Basically this is a sellout of law enforcment for special interests. The brick and mortor gaming industry doesn’t want the competetion so they had their competetion arrested. This is like Barnes and Noble getting online book selling banned and arresting the founders of Amazon. Don’t tell me for a moment that the government cares a wit about the problems associated with legal gambling. The fact that you can casino gamble in damn near every state in the union puts lie to that. There is nothing illegal about gambling. It is just illegal to compete against the connected gaming industry.

  7. Didn’t we fight the war of 1812 over shit like this, only in reverse? Brits are such pussies. They’ll not only take it, they’ll have everyone who works for the city watching it on public camera.

  8. Basically this is a sellout of law enforcment for special interests. The brick and mortor gaming industry doesn’t want the competetion so they had their competetion arrested. This is like Barnes and Noble getting online book selling banned and arresting the founders of Amazon. Don’t tell me for a moment that the government cares a wit about the problems associated with legal gambling. The fact that you can casino gamble in damn near every state in the union puts lie to that. There is nothing illegal about gambling. It is just illegal to compete against the connected gaming industry.

    You’re 100% right, and that’s what happens when you allow legal gambling.

  9. I’m not quite following you there Dan. The problem here is that a certai subset is being kept illegal, partially due to influence of other gambling institutions not wanting competition. Your response is, “That is what happens when you allow legal gambling?”

    I could see you making one of your attacks about influencing government but the whole legal gambling angle seems weird. The issue is it is only partially legal gambling. If they allowed internet gambling, there would be no relevant law for law enforcement to sell out to.

    I mean heck, up until relatively recently, it was illegal in many steps to order wine over the Internet. A lot of local state producers put a lot of time and energy into making sure it stayed that way. Would your response have been, “That is what happens when you don’t have prohibition?”

  10. I don’t get it. Why were they so stupid as to step foot in the US? Couldn’t they have just told the feds to fuck off until the eventual extradition hearings in Britain? I mean, what could the feds have really done to stop this business without the cooperation of the crown?

  11. MP,

    They were arrested when their plane had a layover in the US. I guess if you are based in London and your company is based in Costa Rica, it is hard to avoid touching down on US soil.

  12. Count me in John’s camp on this one. And Dan T.’s comment is true. When you have a homegrown “legal” industry, it is in the interest of that homegrown industry to paint foreign competition as illegal and pull out all the stops to keep that competition away. Perhaps Dan T. meant it as an underhanded condemnation, but, similar to bzial’s point, the phrase could just as easily be “that’s what happens when you allow legal gambling capitalism.”

  13. No, Dan T. believes gambling is eeeeevil. I remember from a previous thread.

  14. They were arrested when their plane had a layover in the US. I guess if you are based in London and your company is based in Costa Rica, it is hard to avoid touching down on US soil.

    You’d think it would be worth making the effort instead of tempting fate. And even so, I still don’t see how putting these guys in jail would at all impact their business. It appears that they are closing down to avoid jail time for themselves, not because the business couldn’t survive.

  15. Gentlemen! We have to protect our phony baloney jobs!

  16. I am not at all a fan of gambling. My point above was simply that you can’t be surprised when an inherently corrupt industry like gambling spreads corruption.

  17. I think you’re confusing mobster-style corruption with sleazy lobbying practices.

  18. “I think you’re confusing mobster-style corruption with sleazy lobbying practices.”

    For once I sympathize with Dan T. Frankly I don’t see how you could not confuse the two.

  19. There’s a difference?

  20. Any libertarian lawyers want to demand charges be pressed the next time a governor of one state makes an illegal bet with the governor of another that his state’s team will win the Super Bowl?

  21. The “U.S. gaming industry” certainly bears some responsibility, but don’t forget all the state-run lotteries. The government likes competition even less.

  22. They were arrested when their plane had a layover in the US.

    Didn’t it happen within a couple of days of the new law’s going into effect? They may well have thought they had nothing to worry about, since they were British. It’s interesting that the Feds even noticed that these guys were on an airplane that was just stopping in the U.S. on layover — I wonder if someone set them up.

  23. If Dan T. could just provide us all with a list of allowable activities, we’ll get on with banning them for him. I’m sure that will be easy enough to do and will make the world a far better place – one we will all enjoy, without pain, sorrow and general nastiness.

  24. Um, banning eveything NOT on the list. Sorry.

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