Shares in online gambling groups dived on Monday after David
Carruthers, the chief executive of Costa Rica-based, UK-listed
BetonSports was detained in the US.
Shares in the online gaming group fell more than 21 per cent to
116p, Sportingbet fell 10.6 per cent to 290p while the largest of the
online poker groups, PartyGaming saw its shares fall 7.3 per cent to
101p.
Betonsports said no one from the company had been able to talk to Mr Carruthers since his detention on Sunday night.
Mr Carruthers and his wife were en route from the UK to the
BetonSports headquarters in Costa Rica when federal authorities
approached Mr Carruthers in the transit lounge of a US airport.
His wife, who was said to be shaken by the experience, was allowed to continue the flight to Costa Rica.
Other internet gaming companies whose share prices have been
affected by the detention of Mr Carruthers, including PartyGaming, had
been in contact with BetonSports seeking information.
Mr Carruthers was in the UK for last Friday's BetonSports annual meeting.
Online gambling has mushroomed into a $12bn worldwide industry.
Half of the revenues are made in the US, but none of the world's 2,500
gambling sites are based there. The 1961 Interstate Wire Act bans
gambling over the telephone and, according to the Department of
Justice, over the internet as well, although this has not been tested
in court.
Last week, the House of Representatives voted to criminalise
electronic payment to gambling sites whether by credit card, wire
transfer, debit or "e-wallet".
The Goodlatte/Leach bill makes it illegal for US financial
institutions to transfer money to offshore gambling websites or to the
online payment services those sites use. But it allows online bets on
horse races, as well as internet-based state lotteries.
Bob Goodlatte, a House Republican sponsor of the bill, blamed
online betting for "moral decline". Jon Kyl, a Republican senator,
lauded the bill's passage, saying internet gambling was as perniciously
addictive as "crack cocaine", but Barney Frank, a Democratic
congressman and opponent of the bill said: "Prohibition didn't work for
alcohol, and it won't work for gambling."
Last week, Mr Carruthers, a leading lobbyist for the gaming
industry in the US, said the Senate had no appetite to discuss the
bill. He added that the debate on internet gambling was moving in the
company's favour, and that he thought improved transparency would lead
to legislation in three to five years.
source : Financial Times
