FBI arrests online betting group’s CEO, Founder

The chief executive of the online betting group BetonSports was arrested on entry to the US airport early yesterday morning by the FBI after he touched down in the US on his way from Britain to the company's main operational base in Costa Rica.

The company ordered to stop taking bets from Americans, as federal prosecutors took a major step towards shutting down the offshore internet betting industry. Investors fear that the arrest marked the start of a broader crackdown on internet gambling, judged to be illegal by the US justice department, sent shares in several online operators sinking.

David Carruthers was taken into custody in Texas, on charges linked with operating an illegal betting operation. And the founder of BetonSports, the maverick bookie Gary Kaplan, 47, has been charged with running illegal gambling operations since 1992.

A BetonSports spokeswoman confirmed the firm's CEO, David Carruthers, 48, was detained, along with his wife Carol, at a US airport at 11pm local time by the federal authorities. Mrs. Carruthers has since flown home to Britain. Last night the spokeswoman said BetonSports had still not heard from Mr. Carruthers.

The US government is asking a court to confiscate $ 4.5bn of assets from BetonSports, the Kaplan family and other defendants.

Mr Carruthers has been one of the most outspoken opponents of new moves to harden the laws against online gambling in the US. Last week, the House of Representatives with majority passed a bill that would update existing laws dating from 1961 to explicitly outlaw bets taken over the internet. Last Friday, Mr Carruthers told shareholders at his firm's annual meeting that the chances of the bill becoming law were "remote". He has said America should legalize and regulate internet gambling.

Mr. Carruthers is being held in custody in Fort Worth, Texas, after a federal grand jury in the Eastern District of Missouri returned a 22-count indictment charging him and 10 other individuals and four corporations on various charges of racketeering, conspiracy and fraud, the US justice department said in a statement. The founder of BetonSports, Gary Kaplan was also charged with 20 felony violations of federal laws, it said. A warrant has been issued for his arrest.

US attorney Catherine Hanaway of the Eastern District of Missouri said: "Illegal commercial gambling across state and international borders is a crime. Misuse of the internet to violate the law can ultimately only serve to harm legitimate businesses. This indictment is but one step in a series of actions designed to punish and seize the profits of individuals who disregard federal and state laws."

News of Mr Carruther's arrest had earlier driven the whole London-listed internet gaming sector down, hitting sports betting companies particularly hard.

Shares in BetonSports have fell 23p, or 16%, to 122.5p and its sportsbook rival Sportingbet lost 42.25p or 13% to 282p. The poker giant PartyGaming, which does not take sports bets, was down 13p to 96p in early trading, but recovered to end the day down 6p at 103p. These are among several offshore companies to have floated in London in recent years that make a lot of their revenues from American gamblers - though they operate from bases outside the US.