The Sentencing of David Carruthers

09 January 2010

David Carruthers’ ordeal is finally over. Or soon will be in 33 months. That is the length of the sentence handed down to him by Judge Carol E. Jackson of the Missouri Eastern district Court following a plea agreement between David Carruthes and federal prosecutors yesterday. He has been confined to a hotel in St. Louis, MO. Since his arrest in 2006, he has been under electronic surveillance while waiting for trial.

In a prepared statement he read in court, he apologized for his mistakes and for the trouble that he and BetOnSports had caused.

This is the end of a battle which started when David Carruthers was arrested on July 16, 2006. On July 18, 2006, BetOnSports suspended trading of its shares on the London Stock Exchange. David Carruthers was released as the CEO one week later. In May 2007, the company pleaded guilty to a racketeering related charge.

In April, 2009, Carruthers pleaded guilty to racketeering charges and agreed to help in the federal investigation and prosecution of BetOnSports founder Gary Kaplan. In October of that same year, he withdrew his plea and pleaded guilty again to the same charge under a new plea agreement with federal prosecutors after Gary Kaplan had pled guilty in the same court.

David Carruthers attorney had asked the court to take into account his 3 years of house confinement and his time in jail. Those pleas obviously fell on deaf ears.

Judge Jackson told Carruthers in court: “I believe your apology and remorse, but I know at some point you learned that this endeavor was illegal. I don’t think you thought it was a grey area. I think you knew there would be ramifications for your conduct.”

David Carruthers arrest and court proceedings have drawn a lot of attention from everyone in the online gaming debate. Barney Frank, Democratic congressman, stated that Carruthers arrest at the Texas airport was: “one of the most Stalinist things I’ve ever seen my government do”.

Gary Kaplan was sentenced to 51 months in prison and forfeited $43 million to the U.S. government on November 2, 2009.

BetonSports was fined $28.2 million on Dec. 1, 2009. A company attorney told the judge that the company would be unable to pay the fine because under United Kingdom law, they have to repay creditors first. In a statement issued in March 2009, a European Union investigation held that the U.S. laws making online betting to be illegal, “constitute an obstacle to trade” which is inconsistent with World Trade Organization rules. “The provisional conclusions of the report imply that WTO proceedings against U.S. measures would be justified,” the 20 member European Commission stated.

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