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Online gambling executive arrested on state charges

Online GamblingOnline Gambling: Online gambling executive arrested on state charges
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Gambling industry experts agree: If you operate an offshore gaming Web site, stay out of the U.S.

Moments after stepping foot on American soil Thursday, Sportingbet PLC Chairman Peter Dicks became the second British offshore sports betting executive arrested in recent months for illegal online gambling in the U.S. Former BetOnSports PLC Chief Executive Officer David Carruthers was arrested on federal charges in July.

It's still unclear if the arrest is a coincidence or part of a government crackdown, but some experts suspect the latter.

And as millions of dollars in bets for the NFL's opening weekend roll into thousands of Web sites, the pressure on the Internet gaming industry has intensified.

"You don't need legal expertise to know if you are running an offshore gambling site, don't come to America right now. You stand a good chance of being arrested," Internet gambling expert and lawyer Nelson Rose said.

Dicks, 64, was arrested at Kennedy International Airport in New York after flying from London, where his Web sites operate legally and are traded on the London Stock Exchange. More than $1.5 billion shares in the company were suspended by the LSE at Sportingbet's request Thursday.

Dicks was detained on a Louisiana state warrant from May for gambling by computer, a felony punishable by up to five years year in prison and a $25,000 fine. Similar warrants have been issued for other Sportingbet associates, but authorities would not release information on who or how many of them are wanted.

Seven states have laws prohibiting Internet gambling. The arrest of Dicks marked the first time one of those states has taken action against one of thousands of big-time online gambling operations. Millions of American players bet an estimated $6 billion per year online, according to industry figures.

Carruthers was detained at a Dallas airport July 16 on federal charges from the U.S. Attorney's office in St. Louis crafted around the 1961 Wire Act. The federal law bans sports bets over the phone (or in this case the Internet), even if the business is overseas.

Cases against offshore betting companies are extremely difficult to prosecute because of the many gray areas — including poker and casino games — in the current law that U.S. lawmakers hope to clear up, Rose said.

"Prosecutors are looking for easy cases," said Rose, a professor at the Whittier College of Law in California. "It has to be sports betting, it has to be one that takes bets by phone and they have to physically be able to catch them. That's the hard part."

The founder and chief executive of the Internet casino Bodog.com, Calvin Ayre, was not surprised by the recent arrest. The Canadian Internet gambling mogul questioned why an online gambling executive that accepts illegal wagers from U.S. customers would come to America in such a risky climate.

"Being the director or senior officer of a public company accepting wagers in the U.S. has become a much more uncertain occupation in the near term," Ayre said in a statement. "The fate of the future of public companies in this space is now open to question."

An online betting conference in Las Vegas, where industry leaders like Ayre were expected to meet this summer, was canceled after the arrest of Carruthers, whose company was one of the world's largest online gambling firms.

While the Justice Department has said it is being more vigilant in prosecuting illegal offshore betting, the department said Thursday's arrest was not a coordinated effort with state authorities.

"This is a separate state case. I can't speculate if there will be federal charges, but there will be discussion," said Louisiana State Police spokesman Dwight Robinette Jr. "Our troopers started taking bets (with Sportingbet) and creating an investigation on this company and Mr. Dicks."

The warrant was issued in May and Dicks' name was flagged during a routine customs check at Kennedy.

Sportingbet Web sites continued to operate Friday and company officials said they expected to continue unless told otherwise by authorities.

BetOnSports closed its U.S. Web sites on a judge's order and fired Carruthers, who remains under house arrest on $1 million bond in the St. Louis area, awaiting trial. He faces 22 counts of fraud and racketeering charges. U.S. customers with gambling accounts have not had their money returned as promised by the company.

"More players with accounts are beginning to worry that they are gambling and depositing money into black holes," said Sue Schneider, publisher of the online gaming magazine, Interactive Gaming News. "That's been the biggest injury to the industry and the concern of most companies."

Meanwhile, lawmakers on both sides of the issue are pushing for change, including a proposed law to prohibit U.S. bank and credit transactions with online gambling operations.

Senate Majority Leader Bill Frist, R-Tenn., says he's committed to bringing legislation banning Internet gambling to the Senate floor for final passage in the coming weeks.

"He understands that this addiction is on the rise and wants to help beef up regulations and enforcement of an issue that affects some who don't even have to leave the comfort of their own couch," said Frist's spokeswoman, Carolyn Weyforth.

There is some doubt in Washington as to whether the bill will be voted on by the Senate with other more pressing matters to decide on in this session.

Republican Nevada Congressman Jon Porter introduced a bill calling for an 18-month study of Internet gambling that could ultimately create laws to regulate, tax and legalize Internet gambling in the U.S.

AP

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10 comments. Last comment 10 years ago by GASMETERGUY.
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Raven62's avatar - binary
New Jersey
United States
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June 28, 2005
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Posted: September 8, 2006, 6:19 pm - IP Logged

Seems foolhardy on his part to fly to the US after the recent arrests of other Online Gambling Executives.

    BobP's avatar - bobp avatar.png
    Dump Water Florida
    United States
    Member #380
    June 5, 2002
    3103 Posts
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    Posted: September 9, 2006, 1:33 am - IP Logged

    The former president of Iran, an international criminal head of a terrorist state arrives here and we don't even bother to ask him about what's going on in Iran let alone tossing his ass in jail.

    Instead we go after the president of a perfectly  legal U.K.  company just because we don't have freedom here in the U.S. to spend our money as we see fit. 

    The likely result is other countries will start doing the same to our company executives. 

    The U.S. is stuck on stupid. BobP

    A fine is the price for doing something wrong. 
    A tax is the price for doing something right.


      floridian's avatar - DiscoBallGlowing

      United States
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      August 28, 2006
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      Posted: September 9, 2006, 11:32 am - IP Logged

      BobP

      You are correct and I applaud your post.  What you have outlined is the real problem that no one except for a few really identify.

      I will add one more, what about the former president of Iran being given respect and allowed in this country to speak at Harvard and the UN?  Thank God Massachusetts Governor Mitt Romney at least told the country he was not going to provide this guy security at State expense.  However, the State Department will provide secuity for this dog at taxpayers expense.  Have certain people in this country lost their minds.  I thought we were at war with terriorists.

      Man, I just give up, we are bound and determined to shoot ourselves in the foot, the arm, the head till there is nothing left.

      Anyway back to focusing on the Lottery.

      May all your picks be winners and your winners be monsters. 

      Floridian

        Avatar
        Coastal Georgia
        United States
        Member #2653
        October 30, 2003
        1866 Posts
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        Posted: September 9, 2006, 2:42 pm - IP Logged

        Correct, Bob P.

        "I have seen the enemy and he is us"

        ..DD

         

                                       

                      

         

         

          Avatar

          United States
          Member #10720
          January 23, 2005
          933 Posts
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          Posted: September 10, 2006, 1:20 am - IP Logged

          I want to vote to eliminate all computerized drawings, including computer-only-controlled online casino games. I don't mean to eliminate drawings period but to eliminate the "computerized" aspect of it. Don't get me wrong here. I just want all of it (Lottery or Casino) to be based on real roulette wheels, decks of cards, ball machines, and human operators. At the very least to fully disclose for any RNG based game what kind of mechanism is generating the random? numbers.

          P.S. if anybody has ever actually seen a slot (actual or virtual) called "Cowboy Jack" please let me know.

            Todd's avatar - Cylon 2.gif
            Chief Bottle Washer
            New Jersey
            United States
            Member #1
            May 31, 2000
            23261 Posts
            Online
            Posted: September 10, 2006, 12:37 pm - IP Logged

            The former president of Iran, an international criminal head of a terrorist state arrives here and we don't even bother to ask him about what's going on in Iran let alone tossing his ass in jail.

            Instead we go after the president of a perfectly  legal U.K.  company just because we don't have freedom here in the U.S. to spend our money as we see fit. 

            The likely result is other countries will start doing the same to our company executives. 

            The U.S. is stuck on stupid. BobP

            A fine is the price for doing something wrong. 
            A tax is the price for doing something right.


            Yes!!!  That is the first thing I thought of when I saw this article also.

            Shame on our stupid State Department for allowing that Hitler-like person into this country.  What is wrong with those people??

            If a couple of terrorist-supporting countries don't like us locking out certain individuals from coming to the United Nations, then move the United Nations the h*** out of here!!!!

             

            Check the State Lottery Report Card
            What grade did your lottery earn?

             

            Sign the Petition for True Lottery Drawings
            Help eliminate computerized drawings!

              RJOh's avatar - chipmunk
              mid-Ohio
              United States
              Member #9
              March 24, 2001
              19825 Posts
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              Posted: September 10, 2006, 1:43 pm - IP Logged

              If the U.S. really wanted to stop on-line gambling, they would treat on-line gamblers like any other criminals and put them in jail.  The government monitor the Internet to catch other criminals, pedophiles, terrorists and the likes, so they know who's breaking the laws by gambling on line. When gamblers who go on-line start during jail time along side other criminals, they will be happy to limit their gambling to state/government approved lotteries and casinos that pay taxes. 

              Maybe in the future if these on-line casinos are approved by the government and start paying local taxes and fees to operate they will become legal.

               * you don't need to buy more tickets, just buy a winning ticket * 
                 
                           Evil Looking       

                BobP's avatar - bobp avatar.png
                Dump Water Florida
                United States
                Member #380
                June 5, 2002
                3103 Posts
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                Posted: September 11, 2006, 1:05 am - IP Logged

                If the U.S. really wanted to stop on-line gambling, they would treat on-line gamblers like any other criminals and put them in jail.  The government monitor the Internet to catch other criminals, pedophiles, terrorists and the likes, so they know who's breaking the laws by gambling on line. When gamblers who go on-line start during jail time along side other criminals, they will be happy to limit their gambling to state/government approved lotteries and casinos that pay taxes. 

                Maybe in the future if these on-line casinos are approved by the government and start paying local taxes and fees to operate they will become legal.

                That's like trying to solve your ant problem with a hammer.

                BobP

                  SirMetro's avatar - center
                  East of Atlanta
                  United States
                  Member #6191
                  August 11, 2004
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                  Posted: September 11, 2006, 12:47 pm - IP Logged

                  What I find as an interesting thought is, if all the off-shore gambling sites were to suddenly arrange to collect and submit tax revenue from the winnings of their players, the Execs would get the red carpet treatment here in the US.

                  Oh and in regards to the former Iran President, who of all people was here to speak about "Ethics". The local and state police told him he was on his own and absolutely NO security would be provided to him. At least the Police there had the guts to make a stand.

                  Have fun all,

                  Sir Metro

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                    NASHVILLE, TENN
                    United States
                    Member #33372
                    February 20, 2006
                    1044 Posts
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                    Posted: September 12, 2006, 1:47 am - IP Logged

                    The former president of Iran, an international criminal head of a terrorist state arrives here and we don't even bother to ask him about what's going on in Iran let alone tossing his ass in jail.

                    **********************************

                    Don't correct me if I am wrong but I believe the former Head Terrorist of Iran was served a summons while he was here. 

                    There are several families of survivors of his holocaust who came to this country.  They are suing Iran and him for millions.  I hope they collect but unless Iran has assets in this country I do not see how they will gain financially.  Anyway there will be a trial.  I hope the news media reports on the details.  This ought to be good.