Online Casino News and Information

CANADA.COM
Romina Maurino, Canadian Press
Published: Tuesday, July 18, 2006

TORONTO (CP) - Shares in Canadian online gambling companies fell Tuesday amid fears that a U.S. crackdown on Internet gaming may spread and affect revenue from firms doing business south of the border.

Shares in software firm CryptoLogic Inc. (TSX:CRY) tumbled $2.69, or 10.8 per cent, to close at $22.19 on the Toronto Stock Exchange, while Fun Technologies Inc. (TSX:FUN), an online gambling firm, was down five cents at $5.35.

Shares in Las Vegas From Home.com, or LVFH (TSXV:LVH), the parent company of Action Poker Gaming Inc. closed off three cents, or 15 per cent, at 17 cents on the TSX Venture Exchange, and Parlay Entertainment Inc. (TSXV:PEI) fell four cents, or 2.5 per cent, to $1.51.

Vancouver-based Chartwell Technology Inc. (TSX:CWH) was down two cents to $2.35, before rebounding to close unchanged at $2.37. ESI Entertainment Systems (TSX:ESY) fell two cents to $2.97, and Great Canadian Gaming (TSX:GCD), a Richmond, B.C.-based casino operator, closed at $11.12, off 37 cents or 3.2 per cent.

The declines followed news that 11 people, including the CEO of a big offshore gambling website, were charged with conspiracy, racketeering and fraud in the United States.

BetOnSports chief executive David Carruthers and four other defendants were arrested last weekend on charges stemming from sports bets allegedly collected from U.S. residents.

The U.S. Justice Department is seeking the forfeiture of $4.5 billion US as well as…..

MORE - READ COMPLETE ARTICLE AT CANADA.COM

Posted on Sun, Jul. 16, 2006
Grand Forks Herald (GrandForksHerald.com)
DALE WETZEL
Associated Press

BISMARCK, N.D. - New federal legislation may derail Fargo state Rep. Jim Kasper’s plans to revive a proposal to make North Dakota the first state to license Internet poker sites.

The measure, which the U.S. House overwhelmingly approved last week, would ban Internet gambling sites, including online poker rooms, from taking money from customers in the United States.

It changes a 1961 antigambling law, called the Wire Act, to explicitly apply its terms to Internet gambling. It requires the Federal Reserve and the U.S. Treasury Department to write regulations to block gambling money transfers by American banks.

Kasper said he has not reviewed the legislation, which is a meshing of separate bills introduced by Reps. Bob Goodlatte, R-Va., and Jim Leach, R-Iowa. The House endorsed it 317-93. One of its supporters was Rep. Earl Pomeroy, D-N.D.

Approval from the Senate and President Bush is still needed for the bill to become law. The Senate has not taken up the measure, and may not do so before the current session of Congress concludes at year’s end.

MORE - READ THE COMPLETE ARTICLE AT GRAND FORKS HERALD (GrandForksHerald.com)

Inside BAY AREA
The ARGUS
07/17/2006 06:57:19 AM PDT

THE House passed a prohibition on Internet wagering Tuesday that would theoretically prevent gamblers from using credit cards to bet online and could block access to gambling Web sites.

Proponents say gambling can be addictive, and then exposed a lack a consistency in their argument by voting for the bill, which carves out exceptions for state lotteries and horse racing.

Citing such precedents as Prohibition and the war on drugs, however, critics say people who want to gamble online are going to find a way to do it anyway and, on the Internet, that won’t be hard to do.

If the U.S. government wants to control online gambling and boost revenues, it should explore ways to lure such online operations, which are now mostly located overseas, to American soil. Not only would it serve as a protection to the gamblers, who could be sure approved sites operated with oversight and presumably a minimum level of fairness, but the tax revenues could generate $3 billion in federal revenue and $1 billion for states, by one estimate.

Among the problems with this legislation is the fact it would require banks to block transactions with gambling sites, making them essentially the police.

Rep. Bobby Scott, D-Va., argued that would be totally ineffective because banks and credit card companies would find it impossible to detect gambling sites that conceal their identities.

In other words, “it cannot possibly be enforced,” Scott said.

MORE - READ THE COMPLETE ARTICLE AT Inside BAY AREA.com

“The people who are pushing this ban in Congress … try to argue these sites prey on children, which is totally ridiculous,” “If your kid has access to your checking account or credit card and is making transfers to off-shore accounts across the world, Internet gambling is the least of your worries.” - Radley Balko

ABC NEWS
By JONATHAN SILVERSTEIN

The DOJ Claims Charges Against Online Betting Companies Not ‘Grand Message’ - Others Not Convinced

July 18, 2006 — Yesterday, the Department of Justice [DOJ] announced charges against 11 individuals and four companies accused of taking sports bets from U.S. residents in the $12 billion a year online gambling industry.

The charges focused on the persons and companies that supported BetonSports PLC, a U.K. incorporated, publicly traded company and popular Internet sportsbook that claims to have 1.2 million registered users.

“The view of the DOJ is and has been that Internet gambling is illegal,” said Brian Sierra, a spokesperson for the DOJ.

Among those charged were the company’s CEO David Carruthers — arrested over the weekend at the Dallas-Fort Worth Airport — and the site’s founder Gary Kaplan. Both are charged with conspiracy, racketeering and fraud.

Many, both in and out of the industry, see this as the opening salvo in a battle to bring down Internet gambling in the U.S., just a week after Congress voted in favor of legislation clarifying that gambling online is a crime.

“It’s a moral crusade,” claimed Radley Balko, a policy analyst at the CATO Institute, an organization that scrutizes public policy. “These guys have a personal opposition to gambling and they want to impose that on the rest of the country.”

MORE - READ THE COMPLETE STORY AT ABC NEWS

Reuters
Tue Jul 18, 2006 5:11pm ET16
By Julie Vorman

WASHINGTON, July 18 (Reuters) - The indictment of BETonSPORTS Plc (BSS.L: Quote, Profile, Research) executives for racketeering should add momentum to U.S. legislation that aims to ban broader types of Internet gambling, two Republican backers said on Tuesday.

The U.S. House of Representatives overwhelmingly approved a bill earlier this month that would prohibit most forms of Internet gambling and make it illegal for banks and credit card companies to make payments to online gambling sites.

A similar bill is pending in the U.S. Senate, where supporters are scrambling to win passage before an August recess.

The $12 billion-a-year online gambling industry was shaken this week after a grand jury in St. Louis indicted BETonSPORTS Plc (BSS.L: Quote, Profile, Research) and some of its executives.

Chief Executive David Carruthers was arrested while changing airplanes at the Dallas-Fort Worth Airport and three other men linked to the company were arrested in Florida. An arrest warrant was issued for BETonSPORTS founder Gary Kaplan, who lives in Costa Rica.

The high-profile case is being prosecuted by a newly appointed U.S. Attorney in St. Louis, Catherine Hanaway, and accuses Kaplan of taking bets from undercover federal agents. The government said in court documents it could seek forfeiture of more than $4.5 billion and other assets from the company and its executives.

READ THE COMPLETE STORY HERE - REUTERS

MSNBC
Financial Times

by Roger Blitz
Updated: 12:12 a.m. ET July 18, 2006

David Carruthers, the internet gambling executive detained by US authorities, had discussed with his chairman the prospect of such an occurrence if he visited the US.

The BetonSports chief executive and other executives in the industry have spent plenty of time in the US talking to politicians, appearing in the media, arguing their case for a properly regulated industry which would also provide a healthy tax take for the US Treasury.

But by common consent, Mr Carruthers has been the most vocal critic of the Goodlatte/Leach anti-gaming bill now making its way through the US Senate.

As Federal officials continued to talk to Mr Carruthers on Monday night, analysts were coming round to the view that his detention was a politically motivated act, aimed at putting the skids under the most vocal proponent in the US of the online gambling industry.

Asked if Mr Carruthers had raised issues about visiting the US, Clive Parritt, BetonSports chairman, said: “Had we conjectured that there would be difficulties, of course. Had we made a plan – not really.”

Mr Parritt said the company had not anticipated the chief executive’s detention. “He has been quite high profile and been in and out of the US quite a number of times in years and was promoting legalised gambling.”

READ THE COMPLETE ARTICLE BY ROGER BLITZ AT MSNBC Copyright The Financial Times Ltd. All rights reserved.

David Carruthers was charged with conspiracy in offering bets on college and professional sports to U.S. residents and that BetonSports took wagers via internet and lelephone line. He’s being held without bail at this time. Federal prosecutors requested that no bail be set until David is sent to Missouri to face charges. The judge allowed David be held without bail at least until Friday, when the detention hearing is scheduled.

Department of Justice
MONDAY, JULY 17, 2006

Eleven Individuals and Four Corporations Indicted on Racketeering, Conspiracy and Fraud Charges

WASHINGTON – A federal grand jury in the Eastern District of Missouri has returned a 22-count indictment charging 11 individuals and four corporations on various charges of racketeering, conspiracy and fraud, the Department of Justice announced today. The indictment was returned on June 1, 2006, and unsealed today.

BetonSports PLC, a publicly-traded holding company that owns a number of Internet sportsbooks and casinos, was among the companies charged in the indictment. The founder of BetonSports.com, Gary Stephen Kaplan, 47, was charged with 20 felony violations of federal laws including: the Wire Act, Racketeer Influenced and Corrupt Organizations (RICO) Conspiracy, interstate transportation of gambling paraphernalia, interference with the administration of Internal Revenue laws and tax evasion.

Other defendants in the racketeering conspiracy include: Kaplan’s siblings, Neil Scott Kaplan and Lori Kaplan Multz; Norman Steinberg; David Carruthers, chief executive officer of BetonSports.com; Peter Wilson, media director for BetonSports.com; and Tim Brown, Steinberg’s son-in-law. The three other charged companies, all Florida-based, were Direct Mail Expertise, Inc., DME Global Marketing and Fulfillment Inc. and Mobile Promotions Inc. Also charged are William Hernan Lenis; Monica Lenis and Manny Gustavo Lenis, owners and operators of the Florida companies; and William Hernan Lenis’ son, William Luis Lenis.

“Illegal commercial gambling across state and international borders is a crime,” said U.S Attorney Catherine L. Hanaway of the Eastern District of Missouri. “Misuse of the Internet to violate the law can ultimately only serve to harm legitimate businesses. This indictment is but one step in a series of actions designed to punish and seize the profits of individuals who disregard federal and state laws.”

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Cincinnati.Com
The Enquirer

Editorials

The U.S. House feels Americans need to be saved from a $12 billion-a-year growth industry - Internet gambling.

By a lopsided 317-93 vote, members passed the Unlawful Internet Gambling Enforcement Act on Tuesday, but exempted state-run lotteries and online horse-race betting. Were the Senate to go along with it, the bill would make online sports betting, poker and other popular Internet casino games illegal.

A shrewder way forward than selective prohibition may lie in regulating and taxing Internet wagers. It isn’t clear if the Senate has the will or wisdom to fix all the problems with this high-stakes legislation. According to one estimate, the federal tax haul from online poker alone could total more than $3 billion a year. But the challenge with either regulation or prohibition is enforcement. Almost all of the roughly 4,000 gambling Web sites are based offshore.

Some are believed fronts for illegal drug traders, money launderers or terrorist groups. Americans account for about half of all Internet gamblers. They should be alerted to the industry’s possible ties to criminals and to the risks of gambling addiction, but the Senate ought to be ultra-cautious about expanding nanny government into cyberspace. Senators should ask themselves just how far the federal government should go in restricting Americans’ private forms of entertainment.

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David Carruthers is scheduled to appear in Federal Court today at 3:00 pm est. It’s been reported that he will be charged under federal racketeering statutes (RICO). David was apprehended yesterday while traveling through Miami on his way home to Costa Rica. Bail may be denied in this case.