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BetOnSports pleads guilty to racketeering

Discussion in 'Casino Industry Discussion' started by Ian_go, May 24, 2007.

    May 24, 2007
  1. Ian_go

    Ian_go Dormant account

    keeping the peace
    St. Louis Business Journal - 12:58 PM CDT Thursday, May 24, 2007

    BetOnSports plc pleaded guilty to federal racketeering charges, U.S. Attorney Catherine Hanaway said Thursday, and could now face $500,000 or more in fines.

    United Kingdom-based BetOnSports plc, a publicly traded holding company that owned a number of Internet sports books and casinos, is the corporate parent of the companies whose gambling operations are described in the indictment.

    BetOnSports plc officials were indicted in July 2006 by a federal grand jury on various charges of racketeering, conspiracy and fraud. According to the indictment, BetOnSports.com, based in Costa Rica, misleadingly advertised itself as the "World's Largest Legal and Licensed Sportsbook."

    After being arrested in the Dominican Republic in March and extradited to St. Louis, BetOnSports founder Gary Kaplan, 48, pleaded not guilty earlier this month to 20 felony charges including violations of the Wire Act, Racketeer Influenced and Corrupt Organizations (RICO) Act, and tax evasion.

    As part of BetOnSports' plea agreement Thursday, Hanaway agreed that as long as the company lives up to its obligations under the agreement, including supplying witnesses and evidence in the pending cases against co-defendants, no further criminal prosecution will be brought in the Eastern District of Missouri relative to its participation in the Kaplan Gambling Enterprise between July 2004 and the present.

    By pleading guilty to the racketeering conspiracy charge, BetOnSports admits that it conducted an enterprise through a pattern of racketeering acts, including repeated mail and wire fraud, operated an illegal gambling business, laundered money, and admitted to multiple state gambling felony charges, according to a release from Hanaway's office. The corporation admitted in federal court that the gambling enterprise began as an illegal sports betting business in New York City in the early 1990s, the release said. After its founder's arrest on New York State gambling charges in May 1993, the founder relocated his operation to Florida, continuing to take sports wagers from bettors in New York by telephone. In 1995, the gambling operation moved to Aruba, in the West Indies and established toll-free telephone services to take sports wagers from gamblers in the U.S. and started to accept sports wagers through the Internet. In 1997, the gambling enterprise relocated to Antigua, and then to Costa Rica.

    The company faces a fine of up to $500,000 or more: The maximum fine can be double the financial gain from or loss caused by the enterprise. It also faces possible forfeitures, and the company is subject to a permanent injunction that requires it to repay money received from U.S. gamblers held by the company as of June 1, 2006.

    According to the plea agreement, currently the U.S. Attorney's Office doesn't plan to charge any past or present individual BetOnSports plc director, other than those already charged.

    Sentencing has been set for Oct. 19.

    No trial date has been set for the remaining co-defendants.

    BetOnSports said in November it would permanently stop accepting bets from U.S. customers as part of an earlier settlement with Hanaway's office. The company is in the process of paying off customers, creditors and employees.

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