Former BetOnSports CEO Pleads Quilty
The former CEO of the now-defunct billion-dollar international online gambling powerhouse BetOnSports pleaded guilty this morning in federal court in St. Louis to racketeering conspiracy and admitted helping to run an illegal betting operation.
David Carruthers, 51, told U.S. District Judge Carol Jackson that he was recruited in 2000 by BetOnSports founder Gary Kaplan and initially did not believe online gambling to be illegal.
But he said that eventually he realized that it was illegal, and that BetOnSports continued to advertise to U.S. customers that the company was “legal and licensed” while “furtively or covertly” collecting bets and paying out money owed to gamblers.
In exchange for the guilty plea, and Carruthers’ agreement to cooperate with the others still facing charges, federal prosecutors will drop seven other charges and agree to recommend no more than 33 months in prison.
Carruthers could have faced almost 20 years in prison under federal sentencing guidelines.
BetOnSports, Carruthers, Kaplan and their associates were indicted in federal court in St. Louis in 2006 on federal racketeering, conspiracy, mail fraud and gambling charges. Carruthers was arrested in July of 2006 and placed on house arrest a month later after posting a $1 million bond. He will remain free while awaiting the trial of the others and his eventual sentencing.
Kaplan has been in jail since his arrest in March 2007. The company pleaded guilty in May 2007 and agreed to cooperate with investigators.
Casinos Good for the Economy
State lawmakers, the various governors and U.S. Sen. George Voinovich can debate the merits of casino gambling until the buildings around us crumble from neglect. The righteous arguments played out over decades have not served Ohioans as other state legislatures enacted responsible and successful gambling statutes.
That was then, then, then, and this is now. Ohio lawmakers once again take up the debate, and state Rep. Dennis Murray Jr. took a strong pro-gambling stand, and a strong stand for Sandusky and the Firelands region. We agree with Murray, and others, entirely, that the lakefront along Erie, Ottawa and Lorain counties is the perfect venue to introduce the changes responsible casino gambling regulations will bring.
Here’s what is known for sure: The casino gambling industry has been successfully implemented in states across the country and in all the states surrounding Ohio. It creates good jobs, good tourism. It attracts responsible adults who vacation with their families to communities, and it generates reliable and substantial tax revenue.
This issue will continue to return and be pushed by varying interests that may eventually succeed in passing a statewide referendum — and we have seen from the well-intentioned but flawed language of the recent no-smoking ban that doing so would create as many problems in implementation. Legislators have a responsibility to properly bring gambling to Ohio, and now is the time to do it.
Ohio has missed this boat for far too long because some leaders upend the responsible path with old, tired and disproved arguments of moral degradation if the casino gambling genie gets out of the bottle. Strickland, Voinovich and other leaders pushing back should back away now and let the legislative process create and implement responsible casino gambling legislation.
It’s way past time to let that genie out, and if the legislation is responsible, it will include the Sandusky area as a destination place for casino gambling. It’s a natural fit for Vacationland. The infrastructure is here already, and the complementary industries (the best amusement park in the universe) sit here on the lake waiting for the shot in the arm, the true stimulus that this industry, this state and Ohioans all deserve.
Cops Bust Illegal 8-liner Gambling Trailer
The Nacogdoches County Sheriff’s Office raided a double-wide trailer Saturday night around 10 p.m. and arrested three suspected gambling operators, seized nearly 70 illegal gambling machines and issued citations to about 40 patrons. Five other suspected employees of the illicit casino were cited with Class A misdemeanor court summonses.
More than two dozen law enforcement officers from the Texas Alcoholic Beverage Commission, state police and Texas Rangers also participated in the raid on the establishment, located off FM 225 just outside the city limits.
Patrons remained at their seats while authorities combed the trailer for evidence of drugs, guns and alcohol, but none were found. Inside the back office, police recovered an electronic money counter, and at the front desk, three fire-proof safes were located containing an undetermined amount of money and gift cards.
After sending two undercover officers inside, the sheriff’s office received the go-ahead via text message about an hour later to conduct the raid, which involved over a dozen marked and unmarked police vehicles. Police first took into custody a suspected look-out in front of the dirt road that led to the trailer while other vehicles raced toward the full parking lot in front of the trailer. Once the property was secured, police began issuing citations to the mostly middle aged and elderly patrons inside. Some worried that they would lose their jobs over the raid, and others just remained silent but cooperative while police searched the structure.
Speaking with reporters at the scene, Nacogdoches County Sheriff Thomas Kerss said, “Obviously we think it was a very successful operation from our standpoint. It’s very obvious that this is an ongoing illegal gaming operation, and we will seize any cash involvement.”
Based on a local citizen’s tip, Daily Sentinel reporters visited the alleged gambling hall earlier in the week to verify sources’ claims that a double-wide trailer located on a dirt road about 500 yards off of FM 225, just outside the city limits, was, in fact, a popular, yet illegal, casino.
Upon entering, a Daily Sentinel reporter saw about four dozen 8-liner machines and other various arcade-type games crammed into the dimly lit and smoke-filled trailer. Once inside, a money changer, with an inch-thick stack of $5 bills, asked the reporter if he was a police officer, to which the reporter said “no,” made change and sat down at a machine located a few feet from the main counter, where several people were observed to be talking and doing some sort of bookkeeping. While inside the trailer, at around 5:30 p.m., there were about 15 people, mostly middle aged or elderly, playing games like “Money to Burn” and “Trick-or-Treat.” In short time, a cash pay-out was witnessed, verifying that the establishment was operating outside the bounds of state law. When The Daily Sentinel took its information to the Nacogdoches County Sheriff’s Office, a statement was given, and shortly after a warrant was issued to raid the trailer.
8-liners provide bettors eight ways to win, and they look like most slot machines, or video poker machines. While they are not explicitly illegal in Texas, the law says winnings are limited to non-cash prizes worth less than $5 or not more than 10 times the bet. Because 8-liner casinos are often associated with being used to support other illegal operations, such as drug trafficking, and represent lost revenue to the state, the Texas Legislature is currently trying to crack down on them by drafting stricter regulations on those who operate the machines. Operation of an illegal gambling machine is a Class A misdemeanor, and a second offense is a state jail felony. Las Vegas and Atlantic City slot machines are paying out roughly 87 percent of the time and are regulated by state authorities. But un-regulated Texas 8-liners are said to only pay out only about 25 percent, or as low as the owner wishes to set the machine to. 8-liners cost between $1,000 and $2,000 but are capable of making 10 times that in a single month if heavily played.
Reportedly, the gaming devices had been moved from another location in Rusk County near Garrison just six weeks ago, and its loyal clientèle followed the machines into Nacogdoches County where they were placed in a new trailer, complete with wheel chair accessibility, a few hundred feet off FM 225 adjacent to where the former Deep East Texas Regional Narcotics Task Force used to operate. It was apparent that in addition to offering illegal gambling, alcohol was being served from a refrigerator inside the trailer. The property that the backwoods casino sits on is owned local landlord Don Beck, who in 2006 at the age of 72 was sentenced to 12 months in a federal prison and 12 additional months of home detention on illegal firearms charges. Many of Beck’s properties have long been attributed to criminal activity, including prostitution and drug dealing. There was no immediate information available to directly connect Beck with the illegal gambling operation at this seized property.
Nevada Assembly panel endorses state lottery plan
CARSON CITY, Nev. (AP) – According to the AP, a Nevada Assembly panel voted to back a plan for a lottery in the nation’s No. 1 gambling state, despite arguments that it would compete with slot machines and other games of chance.
Since the 1970’s about two dozen failed versions of the plan to endorse state lottery in Nevada have been brought forward to win legaslative approval, but it was not until this past Thursday that the Procedures, Ethics and Constitutional Amendments Committee voted 7-3.
“Let the voters decide,” said freshman Assemblyman Paul Aizley, D-Las Vegas, chief sponsor of the measure, which would have to win approval from lawmakers this year and again in 2011 and then go to a public vote.
There are many others who think that this endorsement of the state lottery will hurt businesses especially in this failing economy. Russell Rowe of Boyd Gaming said a lottery would hurt other aspects of Nevada’s gambling industry, adding lotteries have odds that are so high that they amount to what’s been termed “a tax on stupidity.”
Lotteries are operated in all but eight states now, and experts on such games estimate that Americans spent $57 billion on lottery tickets in 2006 alone — with no more than 2 percent of any of the ticket sales going into any state’s coffers. The rest of the money went to pay for prizes and other expenses.
2nd Man Charged in Gambling Ring Murder
A Jersey City man hiding out in Bayonne was charged yesterday as the getaway driver in connection to the robbery of an illegal gambling establishment in Jersey City that left a man dead in January, officials said.
Anthony Williams, 28, of Garfield Avenue, is charged with felony murder, robbery and weapons offenses in the Jan. 22 daytime robbery that claimed the life of Elisha “Elijah” Benjamin, 59, of Fulton Avenue, Hudson County Prosecutor Edward DeFazio said yesterday.
David Ashley, 25, of Armstrong and Rose avenues, was arrested the night of the robbery, and he faces felony murder charges as well, DeFazio said. Detectives are looking for a third man they say shot Benjamin dead, but that man has not yet been positively identified, officials said.
Investigators developed information that Williams was staying at a home on Avenue F near East 22nd Street and surveillance at the location led to his arrest at 8 a.m. yesterday, DeFazio said.
“The theory of our case it that Anthony Williams . orchestrated this crime,” DeFazio said yesterday. “We believe they knew that the proceeds (of illegal gambling) were at that location and therefore it was the specific target.”
Investigators think the robbers’ take was only a few hundred dollars, DeFazio said.
Authorities say the third suspect was armed with a handgun when he entered the store with Ashley. Store employees were ordered to a back room and the gunman and Benjamin got into an altercation that led to Benjamin’s shooting, DeFazio said.
The second man then cleaned out Benjamin’s pockets and the cash register before both fled, DeFazio said. Benjamin was rushed to the Jersey City Medical Center and was pronounced dead at about 2:40 p.m.
Williams’ bail was set at $750,000 cash or bond when the warrant for his arrest was signed on Feb. 2. Ashley is being held in Hudson County jail in Kearny on $1 million cash-only bail.
Williams was arrested by members of the Hudson County Prosecutor’s Office’s Gang Task Force and agents of the US Marshals New York/New Jersey Fugitive Task Force.
Anyone with information on the fatal robbery is asked to call the Hudson County Prosecutor’s Office’s Homicide Squad at 201-915-1345
High school student illegally obtains adult’s bank account to play online casino
A 16-year-old student illegally obtained a bank account opened in an adult’s name to play online casino games, police said.
“I wanted to have an account under an adult’s name to bet on Internet casino games and bicycle and boat races,” police quoted the male first grader at a private high school in Yachiyo, Chiba Prefecture, as saying.
The Metropolitan Police Department sent papers on the case to the Tokyo Family Court on Friday on suspicion of violating the act on prevention of transfer of criminal proceeds.
According to police, the student bought the ID and password of a Web bank account for 17,000 yen from a 41-year-old housewife in Aichi Prefecture last August, after soliciting bank account sellers on an Internet bulletin board using his home PC, saying he would pay about 10,000 yen.
Around July 2007, the student, who was in the third grade of junior high school, also registered to play online casino games using his mother’s credit card, and worked up about 1.3 million yen in debts, according to police.
In late November last year, the teenage boy defrauded a total of about 70,000 yen from three people by promising to give them bank accounts. The student came up with the idea after running out of money.
European Commission Investigation Finds U.S. Laws on Internet Gambling Violate Trade Agreement
WASHINGTON, March 27, 2009 /PRNewswire-USNewswire via COMTEX/ —-As part of a formal investigation, the European Commission has issued a preliminary report that finds U.S. laws on Internet gambling are legally not justified and discriminatory. The report found that the treatment of foreign Internet gambling operators by the U.S. under existing domestic law constituted a barrier to market access for European companies and is inconsistent with World Trade Organization (WTO: undefined, undefined, undefined%) rules. Legislation previously introduced by Rep. Barney Frank (D-Mass.) would resolve the trade dispute by regulating Internet gambling and creating a level playing field among domestic and foreign Internet gambling operators.
“The European Commission investigation further highlights the need for the Obama Administration and Congress to regulate Internet gambling not only to protect consumers, but in order to restore integrity to the international trade system,” said Jeffrey Sandman, spokesperson for the Safe and Secure Internet Gambling Initiative. “The Obama Administration should seek to forge a new direction on Internet gambling, rather than keeping in place a protectionist trade policy that hypocritically discriminates against foreign online gambling operators.”
E.U. Trade Commissioner Catherine Ashton released a statement that encourages the U.S. to regulate Internet gambling as a way to address this issue. “It is for the U.S. to decide how best to regulate Internet gambling in its market, but this must be done in a way that fully respects WTO obligations. I am hopeful that we can find a swift, negotiated solution to this issue,” said Commissioner Ashton.
Rt Hon. David Blunkett MP, former U.K. Home Secretary and current Member of the U.K. Parliament joined in calling for U.S. regulation, saying, “I fully support the call by the E.U. Trade Commissioner, Cathy Ashton, for urgent U.S. action to regularise the trade relationship, respect WTO rules and to regulate online gambling. This would provide not only fair competition, but protection for individuals and families, and a legal basis on which substantial revenue could be raised at a time of considerable pressure on public finances.”
The investigation by the European Commission is the result of a Trade Barrier Regulation complaint filed by the Remote Gambling Association (RGA: 32.93, -0.06, -0.18%), which represents the largest remote gambling companies in Europe. In its complaint the RGA claims the United States violates international trade law by threatening and pursuing criminal prosecutions, forfeitures and other enforcement actions against foreign Internet gambling operators, while allowing domestic U.S. online gambling operators, primarily horse betting, to flourish.
At the conclusion of the investigation, the European Commission could pursue discussions with the U.S. to find an appropriate solution to end the discrimination. If the parties cannot settle the matter themselves, the Commission could bring a case against the U.S. to the WTO.
A recent analysis found that the U.S. could receive as much as $51.9 billion in federal revenue over the next decade if Internet gambling is regulated as proposed in legislation previously introduced by Representatives Barney Frank (D-Mass.) and Jim McDermott (D-Wash.).
About Safe and Secure Internet Gambling Initiative
The Safe and Secure Internet Gambling Initiative promotes the freedom of individuals to gamble online with the proper safeguards to protect consumers and ensure the integrity of financial transactions. For more information on the Initiative, please visit www.safeandsecureig.org. The Web site provides a means by which individuals can register support for regulated Internet gambling with their elected representatives.
SOURCE Safe and Secure Internet Gambling Initiative
http://www.safeandsecureig.org
