PR: BETonSPORTS CEO Cements Role as Lead Advocate for Regulation


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Jun 30, 1998

BETonSPORTS CEO Cements Role as Lead Advocate for Regulation

In Online Debate with Rep. Jim Leach

LONDON - David Carruthers, CEO of online gaming firm BETonSPORTS plc (LSE:BSS), cemented his role as one of the industry's leading advocates for regulation in an interactive debate with U.S. Congressman Jim Leach.

The debate was hosted, and mediated, by the Wall Street Journal Online and was conducted over an e-mail exchange for most of the day on Monday.

Leach (R-Iowa) is a sponsor of a bill aimed at prohibiting the online gambling industry through the banking sector, the bill was marked up in a sub-committee earlier this month and referred to the full House Judiciary Committee for another hearing.

Carruthers and Leach debated the merits of the bill, which would use the banking industry to police online gambling sties by banning the use of credit cards, checks, and money transfers for Internet wagering transactions.

Leach got the debate started by arguing that Internet gambling sites "sweep dollars out of the U.S. into largely unknown, often criminal hands."

Carruthers responded by informing Leach that many of the same reasons he, and others, wish to prohibit the industry, are the exact same reasons that he is for regulation.

"Prohibiting online gambling would be catastrophic," he said. "Prohibiting the industry would have the exact opposite effect to what the congressman seeks. Prohibition would not stop online gambling, it would send it underground and leave the vulnerable unprotected."

The debate continued with Leach and Carruthers exchanging e-mails back and forth. Among some of the highlights of the debate was an open invitation from Carruthers for Leach to visit the BETonSPORTS corporate facility in San Jose, Costa Rica, or even sit down in Washington face-to-face to discuss the issue more, Leach declined the offer to visit Costa Rica saying that it would be "ethically dubious, if not illegal" for him to visit the company's operations.

The transcript of the entire debate can be found on a free section of the Wall Street Journal Online, the link is listed below:

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About BETonSPORTS: Established in 1995, BetonSports is one of the largest licensed and publicly-traded online wagering companies in the world. Operated by BetonSports plc (LSE: BSS.L), BETonSPORTS is licensed in Europe and the Caribbean with offices in London, Costa Rica, Antigua, Guatemala, Mexico and Malaysia. BETonSPORTS plc owns and operates 20 different online gambling brands, including the world's most dynamic sports book, a casino, and a poker room. Visit for more information.

Safe Harbor Statement: Statements in this announcement that are not strictly historical may be "forward-looking" statements, which involve risks and uncertainties. These include risks and uncertainties relating to customer and supplier relationships and prices, competition, market demand, litigation and other contingent liabilities, the integration and operation of acquired businesses, and economic, political, governmental and technological factors affecting BETonSPORTS plc's operations, markets, products, services and prices, among others, as set forth in public filings.
David Carruthers made an absolute ass out of Jim Leach. I would just express my kudos, but I couldn't resist the link at the bottom to email the editors... it looked so inviting...

Dear Sir:

I write this in full support of David Carruthers' stance on the online gambling industry. Granted, he has a position and a company to defend. And I too have played a role in this industry as a webmaster and as a speaker and moderator. So one may think that we have some bias towards protecting our own agendas.

However, I do not derive any direct benefit from the industry and have not done so since my website was sold to a publicly-listed company on the London Stock Exchange in March of last year. I have also not spoken on the online gambling circuit in 2005 as I refused numerous offers due to time issues and other commitments. Therefore, this email comes to you from my role as an online gambler with a fairly deep insight into the online gambling industry.

One of the key points of Mr. Leach's campaign is the allegation that online gambling serves as a haven for money launderers, based on the testimony of a fomer chief of the FBI's Financial Crimes Section, Dennis Lormel. Mr Lormel, in his testimony to Congress, did not at any point provide any proof whatsoever of his claims, despite the normal practice of those testifying before Congress typically providing all manner of photographs, slides, charts, handouts, and other collateral. He essentially asked Congress to take him on his word alone.

Also relevant may be the fact that Mr. Lormel delivered this testimony shortly after 9/11 under what was obviously a highly-charged situation with reason to be overprotective without properly researching the facts. In his current bio, posted at
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- you will note that there is no mention whatsoever of his testimony regarding online gambling, which Mr Leach so highly depends upon.

Mr Leach also points to the Department of State report about a "concern" which states that "For these reasons, Internet gambling operations are vulnerable to be used, not only for money laundering, but also criminal activities ranging from terrorist financing to tax evasion." Note that the Department of State did not make any such claim that the online gambling industry was a haven for money launderers - it only alluded to the possibility of such a situation.

Since no one has provided any proof of money laundering through the online gambling industry, it must be assumed that the industry is innocent of any such allegations until otherwise proven, or strong credible sources established. This renders Mr Leach's primary argument useless without any further substantiation.

Mr Leach further refers to breaches in law of the Wire Act and the Professional and Amateur Sports Protection Act - but in stating so, says that "When a site solicits and accepts wagers on sporting events and games of chance, these online casinos violate the Wire Act and the Professional and Amateur Sports Protection Act". What he does not appear to realize is that the Wire Act and the Professional and Amateur Sports Protection Act relate only to the act of placing sports wagers. Games of chance and online casinos are not covered by these Acts. Furthermore, a Federal Court from the Eastern District of Louisiana pronounced that "internet gambling on a game of chance is not prohibited conduct under the Wire Act".

The regulation of gambling has traditionally been held by each individual state government. Mr Leach, in fact, stated that "He (Carruthers) is also suggesting not only that the law of the U.S. (the above two referenced statutes) but similar laws that currently exist in all 50 states be overturned." Mr Leach is obviously oblivious to the fact that he too is suggesting that he be allowed to usurp the rights of each state by introducing a federal Act. He cannot have it both ways. Nevada has already introduced its own state legislation barring Internet gambling, as have some other states. So why does he think he needs to introduce federal legislation which will overlap with currently existing legislation in various states?

Mr Carruthers is in favor of regulation, as are many operators in the online gambling industry to the best of my knowledge. Mr Leach says it cannot be regulated. But interstate commerce is regulated by federal law. Telecommunications are regulated by the FCC. US companies with locations outside the US still pay federal taxes. What makes the online gambling industry any different? Why should it not be allowed to pay taxes? Why should it not be allowed to subject itself to proper regulatory methods which are already in use in other industries?

Finally, I will refer to Mr Leach's opening statement.

"Casino gambling, as it is practiced in all Western democracies, has been allowed to exist only with comprehensive regulation. Internet gambling lacks such oversight."

Does Mr Leach represent all Western democracies? Does he think that the United Kingdom is not a Western democracy?

I leave you with these few points to ponder, and I thank you for your time and interest in this issue.

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