Offshore Betting Sites Steer Clear of the US Market After High Profile Arrest

Despite the continuing patronage by Americans of online gambling, executives of offshore gaming operations continue to exercise extreme caution in light of the recent arrest of David Carruthers, former CEO of BetonSports, on charges of fraud and racketeering.

According to experts, online betting executives are wary of the possibility that after being lenient for several years, the US government could target more offshore gaming firms.

“(Operators) are playing a wait-and-see policy to see what the feds manage to pin on (indicted gaming site,” says Simon Holliday, a partner at Global Betting and Gaming Consultants in the UK. “Although the sports books give the impression they are not too concerned, I don’t see them rushing to be in the US now.”

Ladbrokes, the world’s largest bookmaker based in London, said that it is rethinking its plans to take bets from Americans on its gaming sites. While Ladbrokes does not take such bets, the bookmaker expressed trepidation on stepping into the US market.

“Any executive that has anything to do with online gaming, no matter how minor, has got to be apprehensive about setting foot in the United States,” CEO Calvin Ayre said in an e-mail. The company is based in Costa Rica.

“The Justice Department is waging a war of intimidation and it is working in terms of scaring some operators,” says Nelson Rose, a professor at Whittier Law School.


January 28, 2007