Online Gambling Arrests Impact Industry

11 June 2007

The GIGSE or Global Interactive Gaming Summit & Expo as its formally known, is usually the online gaming industry’s biggest event, last year drawing 1800 attendees. Then came the arrests of online gambling executives while in the US and the attendance at this year’s GIGSE drew about half that amount. In an article in the Philadelphia Daily News they take a look at what happened and the repercussions.

“Last July, David Carruthers, the chief executive officer of BetonSports.com, was arrested in Texas and charged with 22 counts of racketeering and fraud. Carruthers is under house arrest and awaiting a trial date… His arrest marked the beginning of a government crackdown on the $12 billion online-gambling industry. And it convinced officers of those companies that it would be wise to avoid visits to North America.”

“There’s a lot of fear,” Robert Gustavsson, marketing director for Snowmen Solutions, an online-marketing and technology company out of Stockholm, Sweden, said of the sparse attendance. “People are stressed.”

“The annual conference…attracts online-gaming operators, regulators and technology manufacturers from around the globe”.

“Because of the new law, most of the companies won’t take U.S. clientele anymore, so those U.S. customers are gone now,” said Mark Balestra, publishing director of River City Group, which puts together the GIGSE event. “The law is a setback for the industry.”

Among those absent from the event were many foreign online-gambling companies that had relied on the US customers for most of their business.

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