THE Scottish chief executive of BetOnSports, the internet bookmaker
charged by American federal prosecutors with racketeering, conspiracy
and fraud, has been sacked by the company - ostensibly because his
arrest means that he cannot do his job.
BetOnSports, which is based in Costa Rica and listed on London's
Alternative Investment Market, said that the contract of David
Carruthers, chief executive since 2000, had been terminated "as a
consequence of (his) continued detention by US authorities" in Dallas.
The statement added: "Clearly, while he remains in the custody of
the US Government, he is unable to perform his duties. Further, the
company has been unable to speak directly with Mr Carruthers."
It is unclear whether the company will help with Mr Carruthers' legal expenses.
Analysts said that the company seemed to be trying to distance
itself from its colourful past, although it appeared last night that a
$150,000-a-year (£81,000) consultancy agreement with Gary Kaplan, its
even more colourful founder and 15 per cent shareholder, had yet to be
terminated.
Sources close to the company suggested that Mr Carruthers, who is
likely to receive a payoff of a year's salary, was the last link to the
period before BetOnSports' 2004 flotation and that his exit would
strengthen the company's hand as it seeks to have a restraining order
preventing it from taking bets in the United States overturned. The
company said that the "alleged improper activity" that had taken place
at its Costa Rican premises during VIP parties had occurred well before
its flotation. Weekend reports claimed that American prostitutes had
been flown in to entertain guests.
Mr Carruthers' predicament contrasts with that of Nigel Potter, the
former Wembley chief executive, who three years ago was allowed to step
down temporarily to defend himself against bribery conspiracy charges
in Rhode Island. He later left the board, but Wembley continued to pay
him a salary and to cover his legal costs.
John Anderson, chief executive of 888 Holdings, the online casino
and poker operator, said that Mr Carruthers' dismissal was "absolutely
outrageous".
Mr Carruthers and ten others, including Mr Kaplan, were named in a
22-count indictment last week issued by the US Justice Department.
BetOnSports is accused of taking bets from US residents by phone and
internet, which the department claims is illegal, and avoiding excise
taxes.
The Justice Department's real target appears to be Mr Kaplan, who
moved his operations offshore after being arrested on gambling charges
in New York in 1993.
BetOnSports is said to be considering options ranging from
scrapping its US-facing websites and selling its remaining business to
defying the Justice Department by restarting its US business.
source : http://www.timesonline.co.uk
