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BetOnSports is Moving to Asia after Losing America

BetOnSports is shutting down most of its operations after being indicted by the United States prosecutors and planned to refocus its business on other parts of the world, notably Asia.

BetOnSports told 800 employees in Costa Rica and Antigua that they would be losing their jobs, according to Kevin Smith, BetOnSports spokesman. The virtual casino has its operations in Costa Rica and Antigua.

The United States attorney for the Eastern District of Missouri unsealed a 22-count indictment against BetOnSports and several executives on July 17, accusing them of running an illegal Internet gambling operation. Prosecutors seek a $4.5 billion penalty against the company and its executives.

A federal judge also granted the prosecutors a temporary restraining order, prohibiting BetOnSports from taking bets from United States residents. Whether BetOnSports would ignore that order, fight it or capitulate, as it now appears to have done, Remains a question.

Nelson Rose, a professor and expert in gambling law at Whittier Law School, commented that the decision by BetOnSports to stop taking bets from the United States appeared in part to stem from a desire to right itself with the investment community.

"The company indeed wanted to signal to investors that it is a responsible operation," said Smith, BetOnSports spokesman.

The development represents a considerable victory for opponents of Internet gambling and one that comes as surprise to some industry analysts. It is a painful one for BetOnSports, which takes 70 to 80 percent of its bets from the United States residents. It is the first time that a publicly traded offshore casino has shut down its operations under pressure from United States prosecutors.

United States prosecutors assert that offshore Internet casinos violate the Federal Wire Act of 1961. Legal experts, noting that the position is untested, say the law seems reasonably construed to cover sports betting but is less clearly applicable to casino games, like blackjack and poker. The House of Representatives recently passed legislation to strengthen the laws against operating Internet casinos but the Senate has not yet passed the legislation.

However, Mr. Carruthers has pleaded not guilty to the federal charges, and people briefed on his situation said his lawyers were negotiating with prosecutors about a bail arrangement that would confine him to St. Louis, or even one residence or hotel.