U.S. settles civil case against British online gambling company BetOnSports

Friday, November 10th 2006, 6:19 am

By: News On 6

ST. LOUIS (AP) _ A federal prosecutor reached a settlement Thursday with online gambling company BetOnSports PLC that permanently bars the London-based company from accepting any bets from the United States.

The lawsuit has been closely watched by the online gambling industry, which generates about $6 billion annually in the United States.

The settlement ends a massive civil case U.S. Attorney Catherine Hanaway filed this summer. It does not effect a criminal case still pending against several BetOnSports employees, including Chief Executive David Carruthers, who remains under house arrest in a St. Louis suburb.

Carruthers faces 22 counts of fraud and racketeering charges. His case is scheduled to go to trial early next year. BetOnSports fired him soon after he was arrested in July.

Hanaway spokeswoman Jan Diltz said the U.S. Attorney's Office would not comment on the civil settlement because the criminal case is ongoing.

BetOnSports said in a statement that it did not admit wrongdoing by entering the settlement.

Spokesman Kevin Smith said about 20 percent of the company's revenue came from other countries, most of them in Asia.

``That will be the total focus of the company now,'' he said.

The settlement requires BetOnSports to open a toll-free telephone service to inform bettors how they can reclaim wagers pending before the suit was filed.

Smith said the hot line should be running within a week. He said he did not know how BetOnSports planned to refund customers.

BetOnSports must also take out an advertisement in a major newspaper telling customers that Internet gambling is illegal in the United States and the company will no longer take their bets. It must post similar messages on its Web sites.

The settlement isn't likely to have a huge effect on the Internet gambling industry, said Nelson Rose, a professor at Whittier College of Law and an expert on Internet gambling.

Rose said companies paid more attention to the recent passage of the Unlawful Internet Gambling Enforcement Act, which President Bush signed into law Oct. 13. The act cracks down on banks that transfer bets placed on the Internet.

Rose said passage of the act forced Internet gambling companies to decide whether they want to risk doing business in the United States.