BETONSPORTS BANNED PERMANENTLY FROM THE U.S.

10 November 2006

CNN MONEY
BetOnSports ban separate from tax suit against company executives.
November 10 2006: 4:29 PM EST

ST. LOUIS (Reuters) — BETonSPORTS Plc and government prosecutors agreed Thursday on a court order permanently restraining the indicted online gaming company from taking bets in the United States, according to a release from a U.S. Attorney Catherine L. Hanaway.

The permanent injunction is an extension of a temporary restraining order against BETonSPORTS (Charts) previously entered in the United States District Court Eastern District of Missouri in St. Louis on July 17, 2006.
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The London-based company has not operated in the United States since mid-August after it and a dozen executives, several from related Florida companies, were named in a 22-count indictment alleging they failed to pay billions of dollars in excise taxes.

It had been placed under a temporary stop-business order by U.S. District Judge Carol Jackson pending discussions on language for a permanent order.

In the interim President George W. Bush signed a law that bans U.S. banks from handling gambling transactions.

On Aug. 16, David Carruthers, the former chief executive of the company, was freed on $1 million bond with strict curbs on his movements.

BETonSPORTS fired Carruthers after his July 16 arrest during a layover at a Texas airport and later announced it had shut down its operations in Costa Rica and Antigua that had served U.S. bettors.

At a Monday hearing before Jackson, the lawyer representing BETonSPORTS, Jeffrey Demerath, said the agreement on the restraining order was not to be taken as an admission of guilt on the part of the company.

Online gambling represents a new challenge to traditional casino companies like Harrah’s (down $0.24 to $74.50, Charts), Boyd Gaming Corp. (down $0.05 to $40.50, Charts), and MGM Mirage (up $0.04 to $44.75, Charts) and whose operations are constrained by the laws of the places they operate in.

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