The week's news was off to a flying start Monday as reports appeared
in the Telegraph that the high profile CEO of BetonSports, David Carruthers
had been detained by US federal officials whilst in transit through
the States on his way to Costa Rica. Carruthers is a British citizen
and was traveling from the UK with his wife at the time.
A statement from the company released to the London Stock Exchange
said it was "seeking clarification as to the basis of the detention"
and a further announcement would be made when appropriate. The statement
emphasized that the business continues to trade normally and that
the Antigua-licenced gaming activities serviced in Costa Rica and
Kuala Lumpur are operating as usual.
Shares in the i-gaming sector reacted negatively as the news hit the
markets on Monday morning, with BetonSports suffering a drop at one
point of over 20 percent. Sportingbet also fell over 10 percent while
PartyGaming saw its share price fall 7.5 percent.
Analysts were at a loss to explain the developments. One suggested
it was strange such a move should be made before any further legislation
should have been made law. Another suggested the US Department of
Justice might have a "beef" with BetonSports for "lots
of reasons; telephone betting, advertising, the founder."
Carruthers has been a high-profile and outspoken proponent of the
regulation of online gambling in the USA rather than prohibition,
and was recently quoted as being confident that current moves to ban
the industry would fail once the proposals reached the Senate.
BetOnSports is based offshore to prevent it from violating US gambling
laws, though it does take bets from US citizens.
Last week the US House of Representatives passed HR 4411, the Internet
Gambling Prohibition Act. The bill proposes a further crackdown on
internet gambling, and has now been passed to the Senate. To become
law, it must be passed by the Senate, where a backlog of legislation
means it may never be debated.