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January 9, 2010

Did federal sentencing of CEO of BetonSports have an over/under?

This new Wired story, which is headlined "Online Gambling Boss Gets 33-Month Sentence," accounts for the cheeky title of this post.  Here are the details of a sentencing against the backdrop of an interesting public policy debate:

The chief executive of an overseas, online gambling operation was sentenced by a U.S. judge to 33 months imprisonment after pleading guilty to racketeering, the government announced Friday.

David Carruthers, 52, the former executive of BetonSports, was handed the sentence Friday in a St. Louis federal courtroom. The authorities said the British man’s online operations were based in Costa Rica, and violated anti-online gaming laws in the United States.

Carruthers’ plea agreement (.pdf) requires him to cooperate in the government’s investigation into the site, which is one of dozens the United States is targeting following the adoption of the Unlawful Internet Gambling Enforcement Act of 2006 (.pdf). Its intended use was to combat terrorism in a bid to control money laundering.

The sentencing comes as U.S. lawmakers consider allowing internet gambling, and as federal regulators step up enforcement against them. “Illegal internet gaming operations continue to be areas of concern for IRS,” said Toni Weirauch, a special agent with the Internal Revenue Service’s Criminal Investigation. “With our law enforcement partners, IRS will continue to play an enforcement role in the illegal gaming industry and other illegal offshore activity.”

One proposal to repeal the 2006 legislation would license internet gambling and tax it. The measure is stalled in a House committee. The Poker Player’s Alliance supports the legislation, and estimates as many as 10 million Americans wager about $6 billion online annually.

January 9, 2010 at 10:59 AM | Permalink


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When those prosecutors leave the Thomas F. Eagleton Building in St. Louis they walk across the street and buy lottery tickets. None of the proceeds from the lottery really arrives at the department of education. Our tax dollars go to housing this guy in prison. For what? He ran a legitimate business in Costa Rica. Maybe it is time that Costa Rica begins prosecuting Americans for selling them things over the internet. Slippery slope here.

Posted by: mpb | Jan 11, 2010 7:37:06 AM

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