16 October 2006


    By Andrew Harris and Benjamin Israel

    Oct. 16 (Bloomberg) — Betonsports Plc., the British Internet bookmaker indicted in the U.S. for illegal gambling, has reached a preliminary deal with prosecutors to end a civil suit seeking to ban the company from doing business in the U.S.

    U.S. District Judge Carol Jackson in St. Louis granted the parties one week to complete what Assistant U.S. Attorney Michael Fagan said was a 21-page accord resolving a civil suit filed against the company in July by the Justice Department.

    “My impression is there are no substantive disagreements,” Fagan told Jackson today. A temporary order barring Betonsports from doing business in the U.S. has been in place since July 17. Neither side disclosed terms of the preliminary agreement in court.

    On July 17, prosecutors also unsealed a 22-count indictment charging Betonsports founder Gary Kaplan, former Chief Executive Officer David Carruthers and nine others with racketeering and violating federal interstate gambling laws. In 2003, the company’s Web site, Betonsports.com, had 100,000 active players who placed 33 million wagers worth more than $1.6 billion, the U.S. has said.

    Carruthers, 48, was arrested in July as he changed planes at a Texas airport. He pleaded not guilty and is currently under house arrest in St. Louis. Kaplan is still at large. Six other defendants have pleaded innocent.

    Banning Payments

    President George W. Bush on Friday signed legislation making it illegal for credit card companies to collect payments for transactions with online gambling sites. Gambling on the Internet has become a $12 billion-a-year business that’s growing rapidly offshore.

    Betonsports attorney Jeffrey Demerath told Jackson today that difficulty in assembling the company’s board of directors for a review of the proposal was the primary obstacle to completing the accord.

    “We received it Thursday afternoon,” Demerath told the judge. “We just haven’t had the time to get everyone together.”

    Outside the courtroom, Demerath declined to comment on the status of the criminal case against Betonsports. He doesn’t represent the individual defendants.

    The civil case is U.S. v. Betonsports Plc., 06cv1064, in the Eastern District of Missouri (St. Louis).

    To contact the reporter on this story: Andrew Harris in Chicago at aharris16@bloomberg.net
    Last Updated: October 16, 2006 11:23 EDT