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Internet Gambling CEO Arrested by FBI
tightpoker writes to mention the news that several key individuals associated with online gambling site BetonSports have been indicted in a Missouri courtroom. Founder Stephen Kaplan, CEO David Carruthers, 9 other people and four corporations have been charged with crimes ranging from racketeering to fraud. The Sunday Time reports on the story as well, addressing fears this may be a prelude to a crackdown on all online gambling by U.S. law enforcement. From the article: "Nigel Parson, leisure analyst at Williams de Broë, said the move would 'throw online gambling stocks into a spin,' adding: 'David Carruthers is a prominent advocate of online gambling. The fear that this is an escalation of the anti-lobby will trouble markets.' Greg Harris, an analyst at Cannacord, said: 'It is too early to say if this is part of a broader strategy on prevention of internet gambling in the U.S. or if it is the Department of Justice flexing their muscles and trying to influence legislation.'"
internet gambling does not allow the government to take their cut and is therefore in direct competition with them. Expect many more such crackdowns soon.
The government gets a healthy cut from the earnings in Las Vegas and Atlantic City. Politicians get hefty contributions due to the earnings from Native American casinos. And lotteries like Powerball are the government's own game.
So it's no wonder that online gambling sites lose, and will continue to lose in court. You've got to pony up to the bosses if you want to work in this town. (Preferably, both Democrats and Republicans.)
What part of "bread and circuses" does this latest incarnation of fuedalism not understand?
Right now, there is no such thing as legal online gambling in the US. Because of that, all online gambling businesses are breaking the law. This particular case might be cut and dry, but the larger issue of our rights online can still be debated.
I think gambling is a tax on people who are bad at math, and should be 100% legal.
Man, you really need that seminar!
"Misuse of the Internet to violate the law can ultimately only serve to harm legitimate businesses."
I don't see how Internet Gambling could harm legitimate business...
Ok, so the US is fighting a couple of wars, holding people indefinitely in GITMO, probably being sucked into another conflict in the middle-east, etc. and THIS is what we spend our time on?
Gambling?
Something is afoot. Methinks it is time to re-enlicit support from the conservative base... elections are around the corner. And we all know that these rich 'moblike' online casino owners are probably funding terrorism, right? Its the perfect issue. You have the 'moral high-ground' and a non-US resident at which to finger-point! Wow. You have to hand it to the Republican party. Machiavelli could have learned a trick or two.
my cube has a window...
So was repealing prohibition a bad idea because everone still goes to speakeasies and drinks hooch? Or are you perhaps mistaken?
You are most certainly on US soil if you're at a US airport getting connecting flights. You may be thinking of embassies.
By that logic, who would pay taxes for _anything_ since it should be easy as pie to sell Twinkies, screwdrivers, or anything else under the table? Also, why would a seller risk his neck avoiding some 5 or 10% tax (that his customers are paying)? If it were legalized the illicit production would mostly dry up because it's much much easier to operate inside of the law than out. Given the choice, I doubt few dealers would choose a life in the worst part of town hounded by the police and thrown in jail every so often. Even the cushy suburban dealers would be estatic not to have to deal with Central American paramilitary cartels as their primary supplier. The concept that legalizing drugs will increase illegal production seems highly counterintuitive to me.
Not to mention that the government will have a much easier time tracking users and abusers if they don't feel that they have to hide from the cops.
On the other hand, I'm rather libertarian about what people do with their lives. As long as it doesn't harm other people, I don't think it should be illegal. I do think lots of stuff should be regulated however, to prevent people from becoming a completely unproductive junkie, but I don't think making the activity illegal is the proper answer. In other words, I don't want anybody stepping in until it's clear that what they're doing is interfering with their life in a substantal way.
I read the internet for the articles.
A lot of the comments revolve around the obligatory "here goes the government again" comments.
Perhaps I'm a bit naive, but it seems obvious to me that jumping on some website hosted in some third-world country and giving them my credit card so I can play poker through some system controlled by the website against God-knows-who just seems like an invitation to get ripped off.
I'm just not surprised in the least bit to hear some online gambling site shut down or involved parties being arrested for fraud or whatever. Frankly, I'm surprised it's taken this long for some government somewhere to actually look at these sites and realize that there is no way at all to stop the owners thereof from ripping off customers coming and going (aside from the massive amounts of money they make simply from the actual gambling itself).
I've got one of the smallest lists of "things I love that our government has its fingers in", but you should also realize that along with the money the government collects around legalized gambling in the US, they also regulate it massivly and crack down fast and hard on places that are ripping people off (above the fact that gambling itself is a ripoff).
- dm- dm - The two most common elements in the universe are Hydrogen and stupidity.
I can't believe this post has an "informative" rating. Of course the places pay out. If they didn't, it would be all over the entarwebs. There's no way an online gaming site could weather the storm of negative publicity that would arise from failure to pay out. Just ask Dutch Boyd http://www.pokertips.org/history/online-poker.php/ .
As for taxes on US operations...um...What US operations? Costa Rica is not in the US. Gibralter is not in the US. Antigua is not in the US.
The porn industry can get required permits because the required permits exist. Online gaming companies can't request a permit that doesn't exist. What kind of nonsense is that?
The fact is the US government wants to get a cut of any transaction of any kind that takes place anywhere in the world. There's no way that can happen with transactions that take place across international boundaries. So they'll just grab the people in charge under whatever pretext they can, hold them by the ankles, and shake them until the money stops falling out.
Control. That's what it's all about.
--Chag
What worries me about this, is that it could be the first steps towards the government regulating and controlling content on what has been, up to this point, a relatively free and open Internet here in the United States.
Interesting details on his arrest:
* NO bail
* feds are seeking over $4 billion in unpaid taxes
* Carruthers was targeted as part of a larger investigation
* Carruthers was held incommunicado until appearing at trial
* FULL TEXT of the fed press release announcing the indictment details
The news from the past few days made it seem like they were just leaning on Carruthers to help with the Kaplan investigation. But some of this stuff is very broad... "equipment used to place bets" is probably just a server. Sounds like he will be away for quite a while.
Business Voyeur