BetonSports sounds US retreat

17-08-2006

Beleaguered internet gambling company BetonSports has said it is to withdraw from its business in the US completely.

The decision comes in the wake of the arrest of the company's chief executive David Carruthers and one of its founders, Gary Kaplan, on charges of repeated mail fraud, wire fraud and money laundering late last month.

Despite denying any knowledge of the alleged crimes, the board of BetonSports has made the decision to shut down its US businesses because, "after thoroughly reviewing possible alternative business plans, they no longer consider the US facing operations of the company… to be viable".

As a result of today's decision around 800 employees of the Costa Rica and Antigua-based company will lose their jobs. This represents a substantial reduction in personnel for BetonSports, which at its Costa Rican headquarters currently employs 2,000 staff in total.

A statement issued today by the BetonSports board outlined plans to end the company's US-driven operations "as soon as viable" but admitted that it anticipated encountering some difficulties.

It says that paying "liabilities to staff and creditors in an orderly manner" and repaying "balances due to US customers" are measures which "will take time", dependent on "the company's ability to persuade banks and cash processors to release its funds".

"The directors are taking steps to ensure that the company will not knowingly accept any wagering transactions from US based customers," the statement added.

Although the ending of BetonSports' involvement in the US online gambling market represents a withdrawal from the sector's most profitable country, observers have pointed out that the ominous threat of forthcoming legal proceedings has helped make a potentially unprofitable continued participation even less attractive.

Along with the BetonSports arrests, ten other people from three other Florida-based firms were implicated in the alleged racketeering scandal while US attorney Catherine Hanaway said two weeks ago that the legal process was "but one step in a series of actions" targeting the American online gambling industry.


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