Bet On Handcuffs

The long arm of American paternalism

Although they supposedly speak English in England, 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 BetOnSports, discovered the significance of that difference during a recent layover at the Dallas/Fort Worth airport, where he was arrested for helping Americans bet on sports. His arrest is part of a larger attempt by the U.S. government to impose its brand of repressive paternalism on countries with more tolerant policies.

Carruthers was on his way from London, where his company is headquartered, to Costa Rica, where its online betting operations are based. The business is perfectly legal in both of those places, but not in the United States. And since most of its customers are Americans, Carruthers is guilty of about 20 different felonies.

Or so the FBI and the Justice Department say, and they're the ones with the guns and handcuffs. Catherine Hanaway, the U.S. attorney for the Eastern District of Missouri, accuses Carruthers and 10 other people associated with BetOnSports, including company founder Gary Kaplan, 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 is using a computer in St. Louis.

The Justice Department disagrees, and on this difference in interpretation it has built an indictment that could send Carruthers to prison for decades. 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.

The timing of the indictment is also suspect. BetOnSports has been in business since the early 1990s, but the Justice Department waited until this summer—coincidentally, less than two weeks after the House voted to ban online gambling and shortly before a Senate vote on the same bill—to announce its charges. Carruthers has been one of the most visible opponents of the ban, urging Congress to legalize and regulate the business instead.

There's no need to speculate about political motives in the case of Marc Emery, the Canadian marijuana seed dealer and vocal anti-prohibitionist who was nabbed by the long arm of American paternalism last year. Karen Tandy, head of the U.S. Drug Enforcement Administration, described Emery's arrest as "a significant blow" against "the marijuana legalization movement," bragging that "drug legalization lobbyists now have one less pot of money to rely on."

Like BetOnSports, Emery's online seed business had been operating openly for more than a decade, with minimal harassment from Canadian law enforcement authorities. In the United States, which is seeking his extradition, he could face a life sentence.

If an executive of a U.S. media company were arrested in Beijing for violating a Chinese law against "subversive" online speech, or in Tehran for creating "indecent" Web content viewed by Iranians, Americans would ask what right these countries have to impose their illiberal policies on us. Sadly, our government is giving people in other countries good cause to wonder the same thing about the United States.

© Copyright 2006 by Creators Syndicate Inc.