[99%evil]

I found this on another board, not sure if it's been posted here.

Tuesday Morning Market: Shockwaves hit on-line gaming sector

By: Phil Cozens, Stockmarket Correspondent

(Update) The gaming sector is under pressure again this morning as a US federal grand jury returned a 22-count indictment charging 11 individuals and four corporations, including BETonSports, on various charges of racketeering, conspiracy and fraud.

BETonSports shares were suspended at 122.5p as the company reviews the impact of the indictment with its lawyers. Shockwaves have reverberated around the rest of the sector.

PartyGaming at 95.5p, World Gaming 88.5p, Sportingbet 228p, Neteller 399p, Leisure & Gaming 87p and 888 Holdings were among the worst hit with falls of between 5.5p and 54p.

Markets elsewhere remained depressed as Israel continued to bomb Lebanon.

On the economic front the sharp increases in gas and electricity bills helped push the UK annual CPI rate up to 2.5% last month, the highest for nine months.

[KYBill]

Not Good.

[Nexttime]

This is just the start. More to come.

[Poboy]

The law had to be challenged in court. This way, once and for all it will have to be decided if the Wire Act applies to the internet.

[Jambine]

Originally Posted by 99%evil

I found this on another board, not sure if it's been posted here.

Did the specify charges? I wonder what exactly they did.

[Nexttime]

Originally Posted by Poboy

The law had to be challenged in court. This way, once and for all it will have to be decided if the Wire Act applies to the internet.

The law has been challenged and they lost:

http://www.washingtonpost.com/wp-srv...es/charged.htm

From 1998. There are couple of other cases more recent. I don't have my bookmarks with me.

[99%evil]

What if you get your internet via satellite connection??????

[JM]

GOOD! Now those spamming b@stards from betonsports will stop sending me junk mail.

[Wooderson]

Dateline: My Hometown, Fort Worth, TX

http://www.msnbc.msn.com/id/13907293/

Links in the story copy below are active.

MSNBC News Services
Updated: 2:50 p.m. CT July 18, 2006


FORT WORTH, Texas - Federal authorities have nabbed the chief executive of a major British-based gambling site as he passed through the United States to catch a connecting flight in a crackdown that sent shudders through the London stock market Wednesday.

BetOnSports Plc chief executive David Carruthers was arrested Sunday as he awaited a flight to Costa Rica, where the company has operations. He was among five company officials arrested in three states over the weeked.

Altogether federal officials have charged 11 people in the crackdown, alleging they committed conspiracy, racketeering and fraud in taking sports bets from U.S. residents. The Justice Department also is seeking forfeiture of $4.5 billion, cars and computers from BetOnSports and three other companies.

The 22-count indictment was unsealed Monday in St. Louis, where a federal judge also ordered BetOnSports to stop accepting bets placed from within the United States.

Several of the defendants live outside the United States, which will make them hard to catch, said U.S. Attorney Catherine Hanaway in St. Louis.
“This is a tough crime to prosecute,” she said.

Among those who live abroad is Gary Stephen Kaplan, the founder of BetOnSports, which is incorporated in the United Kingdom and listed on the London Stock Exchange.

Trading of the company’s shares was suspended in London on Tuesday. Shares of BetOnSports fell as much as 24 percent Monday following news of Carruthers’ arrest, although they later recovered slightly. Stock in other British gambling companies tumbled Wednesday, knocking more than $1 billion off the value of publicly traded companies in the sector.
In the latest fiscal year, BetOnSports said it handled $1.8 billion worth of bets, up 25 percent from the year before. The company reported an operating profit of about $20 million.

Kaplan is a former New York area bookie who moved his operations to the Caribbean after being arrested on gambling charges in New York in 1993.
Despite the move, the United States remains Kaplan’s main market, officials said. He is now living in Costa Rica and owns 15 percent of the company, according to the indictment. A warrant was issued for his arrest.

Authorities said they arrested Kaplan’s brother, Neil Scott Kaplan, who handled purchasing for the company, in Fort Pierce, Fla. Two other defendants were arrested in Miami and another was arrested in Philadelphia.

A federal magistrate ordered Carruthers held until a detention hearing Friday.

Carruthers’ first appearance in court Monday lasted about 10 minutes. He was led into the courtroom in handcuffs, wearing a lime green T-shirt with the words “World Traveler” across the front, faded jeans and gray suede shoes.

Tim Evans, an attorney who appeared on Carruthers’ behalf, handed him a lengthy document, adding, “You won’t have time to read it all, of course.”

Kevin Smith, a spokesman for BetOnSports, said Carruthers and other company officials had no idea that there was an indictment.
“Certainly had they told us, we would have been more than willing to negotiate with them and work on whatever these charges are,” Smith said. “There wouldn’t have been any need to nab him while he’s waiting on a layover for a flight.”

Others named in the indictment include Kaplan’s sister and several BetOnSports employees. The other three companies named in the indictment are based in Florida and handle promotional activity for BetOnSports.

The indictment charges Kaplan with failing to pay federal wagering excise taxes on more than $3.3 billion in U.S. wagers.

Authorities also charged that Kaplan’s group fraudulently claimed that Internet and phone wagering on sporting events was legal and licensed.
Internet gambling has become a political issue in Washington.

Last week, the House passed a bill that would make it illegal for American banks and credit card issuers to make payments to online gambling sites. The bill’s fate in the Senate is uncertain, in part because of exemptions granted for horse racing and state lotteries.

In Britain, executives in the $12 billion-a-year industry were assessing their personal exposure.


WHAT DO YOU THINK?

• Vote: How often do you gamble online?
• Sound off: Are the Feds overreaching?
• Online gambling at a glance

“It’s not just travel,” said one U.K. gaming executive who declined to be named. “The U.S. has proved it can get to anyone it wants in the U.K. A lot of executives are feeling very uncomfortable.”

The action comes just a few days after three British bankers were extradited to the United States last week on fraud charges linked to collapsed energy giant Enron Corp.

U.K.-listed stocks in the gambling sector, which lost more than 300 million pounds ($548 million) Monday, fell again after BETonSPORTS asked that its stock be suspended.

Sportingbet.com Plc plunged 35 percent, while Partygaming Plc fell 17 percent, 888 Plc was off 13 percent, and BetandWin.com Interactive Entertainment AG tumbled 24 percent.

Although online gaming is not explicitly illegal in the United States, the Justice Department has signaled its disapproval, saying it is barred by the Wire Wager Act.

As a result, online gaming companies have settled offshore in such locations as Antigua and Costa Rica and had been operating freely in the United States -- until this week.

Reuters and The Associated Press contributed to this story.

[99%evil]

Man..., they're going to take down all the poker sites...just you watch. This is not good.