TELECOM Digest OnLine - Sorted: Bet on Sports no Longer Doing US Business

Bet on Sports no Longer Doing US Business

Jane Wardell, AP (
Fri, 11 Aug 2006 12:43:50 -0500

BetOnSports shuts U.S.-focused business
By JANE WARDELL, AP Business Writer

BetOnSports PLC, the British-based Internet gambling company that has
been charged with fraud and racketeering in the United States, said
Friday it will shut down its services for American gamblers.

BetOnSports said it plans to stop operating in Costa Rica and Antigua
-- from where it accepted wagers from tens of thousands of customers
in the United States -- as soon as possible following a U.S. federal
court order for the company to stop taking bets from the country.

The company said the decision would allow it to gain more sales from
outside the United States, in Europe and Asia, to help it pay

However, Wayne Brown, an analyst at Altium said the decision was the
"worst case scenario" that effectively spelled the end of the company,
which currently generates almost three-quarters of its business in the
United States.

The company took in wagers of $735 million and had 50,000 active
players in the first quarter of this year.

Brown said an attempt to focus on the company's Asian operations was
unlikely to succeed.

"Asia provides around 5 percent of profits and is very small in the
scheme of things," he said.

Internet betting is illegal throughout the United States and
authorities there have targeted BetOnSports in a clampdown.

Last month, the company's former chief executive David Carruthers was
arrested at a Texas airport and a 22-count indictment was unveiled in
St. Louis, Mo., alleging fraud and racketeering against the
company. The federal court also ordered the company to stop taking
U.S. bets and return deposits paid by American bettors.

BetOnSports' shares were suspended on the same day. They were worth
around $234 million when they were removed from active trading.

In a statement issued to the London Stock Exchange, the board of
directors said Friday that "after thoroughly reviewing possible
alternative business plans, they no longer consider the U.S.-facing
operations of the company ... to be viable."

The company also pledged to refund the deposits of its U.S.-based
customers, many of whom have uncollected winnings that must be
transferred through third-party agencies based outside the United

The directors said they wanted to refund all customers' money, but
cautioned this would prove difficult and "will depend upon the
company's ability to persuade banks and cash processors to release its

Almost all the wagers placed on BetOnSports come from the U.S. For the
53 weeks preceding February 2005, the company's sportsbook had more
than 71,000 active customers who placed 9.9 million bets. The average
bet was $109. Prosecutors said 97 percent of the sports bets are made
on American football, basketball and baseball.

Associated Press writer Adam Goldman in New York contributed to this

Copyright 2006 The Associated Press.

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