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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.'"
So all of this does, outside of keeping all Gambling Web site owners out of the country, is?
III.IIVIVIXIIVIVIIIVVIIIIXVIIIXIIIIIIIIVIIIIVVIII
I bet 200 bucks, that there will be dupe of this stroy within 2 days.
hilarious
BBC article here
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.)
Before I jump to conclusions, my question is this: Are they really guilty of fraud and racketeering (very serious crimes that should be severely punished), or is this just an excuse to try to stop online gambling? I would be interested in seeing and hearing the evidence that gets presented before making up my mind.
Of course, both sides are going to claim what will support their viewpoint.
On the one hand, the DoJ has been itching for any excuse to go after these folks for a long time, which doesn't help the perception of them. If they had remained legally neutral to the matter and just stuck to what the law says, I sure would be more comfortable that they actually have our best interest at heart and that they're not just pandering to right-wing nutcases.
On the other, the online gambling industry is one that is notoriously rife with fraud, and it's entirely possible that these guys are scum that have been doing what they're accused of or worse. For the sake of their industry, I hope that they have realized the scrutiny that they've been under and have made very diligent efforts to stay clean and legitimate and can prove so in court. Otherwise, these two may very well have doomed their entire industry, even the players that are 100% honest and that just want to provide an entertainment service.
I think that the most telling sign of what the truth is is whether the DoJ starts chasing down all online gambling houses for "fraud" and "racketeering." At any rate, it will be interesting to see how it all turns out.
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!
Slashdot Burying Stories About Slashdot Media Owned
"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...
RTFA (and the moderator that marked your posting insightful should do the same).
Carruthers was arrested by FBI agents in Dallas on Sunday afternoon as he was returning to his home in Costa Rica from a trip to the United Kingdom.
"Illegal commercial gambling across state and international borders is a crime," said U.S Attorney Catherine Hanaway of the Eastern District of Missouri in a press release. "Misuse of the Internet to violate the law can ultimately only serve to harm legitimate businesses.
I'm from Missouri, and I know who those legitimate businesses are. Harrahs, Ameristar, The Casino Queen, and The President. And I bet (pardon the pun) that I know who they donate to. I'm looking at you, Catherine Hanaway.
Your sig(k) has been stolen. There is a puff of smoke!
First they go after big fish in the online gambling market who are operating within the US.
Then they run out of those.
Next they go after big fish in the online gambling market who are operating outside the US.
Other governments tell US to go DIAF
US sees the only other way to address problems as going after the gamblers instead.
US uses this as a reason to further OK tracking all internet traffic.
We know where that goes.
There's no good outcome from this path. But greed will drive politicians to it.
I'm a fiscal conservative, it's a pity we don't have a political party anymore
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.
What this amounts to is that Americans have no concept of freedom or property rights such as they claim. If I have $10 and wish to wager it on the outcome of an event that has a certain chance of success or failure, I am not hurting anyone other than myself. The irony is that if they would have paid taxes (which I consider to be nothing more than extortion) on their earnings to the federal government it sounds like they would have been allowed to survive unmolested. It just goes to show the lengths to which our government will go to stomp on our natural rights. The only moral right we have as humans is to proceed with the course of our action as long as it doesn't forcibly harm anyone else. We are denied this every day in multiple ways. I fear that we have been conditioned to accept this as a legitimate cost of being in society. All the while, the fat cats in charge are laughing at how easy it is for them to earn a living at others expense.
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.
Apearently there IS NO LAW against on-line gambling possably there are some state laws but the FBI does not enforce state laws. These guys could have been sell shoes buti f they cheated customers and didn't pay taxes they be shut down just the same --- well likey not the FBI does not waste time with small scale crimes and I doubt they'd be selling $3 billion in shoes
Even the Porn industry is mostly above board and gets the required permits, pays resonable wadges, takes out payroll and income tax withholdings and keeps books and pays taxes. on-line gambling could do the same but apearently these guys didn't. This is NOT a big deal.
What does "bread and circuses" have to do with D and D? Bread and circuses was the Roman Empire's way of keeping the masses in check by keeping their minds off of the real issues. As long as the every day Roman had plenty of bread (food) and plenty of cheap entertainment (circuses), they were happy. Of course, eventually the Empire collapsed and feudalism took over. Thus began the so called "dark ages" in Europe. The Eastern (Constantinople) Roman Empire lasted another 1000 years, but Western Europe ruled by Kings and the Roman Catholic Church.
That said, gambling is a form of "circuses" (entertainment) in our time. The Government is attempting ban Internet gambling, yet still allow track wagering online. This means that I cannot (legally) play Texas hold-em (for money) online, but I can bet on the Kentucky Derby at my computer instead of driving the 10 miles or so to Churchill Downs (yes, I live in Louisville).
Beware of Sleestak
...for all connecting passengers. Many (most?) countries, such as France, don't require immigration if you are just connecting. Makes sense, you would think, as for countries that don't require immigation it helps promote their airports as hubs with all the attendant economic benefits. Much faster transfers, no visa hassles, etc. I guess the US is a big enough landmass with few alternative hubs nearby.
This fact is how Canadian Mahar Arar was extraordinarily renditioned by the US to Syria coming home to Canada from holiday in Tunisia - he had the misfortune to connect in New York.
Most of the posts I have read seem to imply that this applies to all casino games, including poker, blackjack, etc. From the research I have done, current federal law only prohibits betting on sporting events. This is part of the Wire act, of which the applicable portion is: "Whoever being engaged in the business of betting or wagering knowingly uses a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest, or for the transmission of a wire communication which entitles the recipient to receive money or credit as a result of bets or wagers, or for information assisting in the placing of bets or wagers, shall be fined under this title or imprisoned not more than two years, or both."
l /
In February 2001, Judge Stanwood Duval of the US District Court in New Orleans ruled "'in plain language' [the Wire Act] does not prohibit Internet gambling 'on a game of chance.'"
On November 21, 2002, the US Fifth Circuit Federal Appeals Court upheld Duval's ruling, stating: "The district court concluded that the Wire Act concerns gambling on sporting events or contests... We agree with the district court's statutory interpretation, its reading of the relevant case law, its summary of the relevant legislative history, and its conclusion."
The Appeals Court further states: "Because we find neither the Wire Act nor the mail and wire fraud statutes may serve as predicates here, we need not consider the other federal statutes identified by the Plaintiffs... As the district court correctly explained, these sections may not serve as predicates here because the Defendants did not violate any applicable federal or state law."
The Appeals Court specifically cites Duval's statement: "[A] plain reading of the statutory language [of the Wire Act] clearly requires that the object of the gambling be a sporting event or contest." This is very explicit language. You would have to jump through a lot of mental hoops to consider the playing of online poker to be "a sporting event".
Finally, in November 2004, the Caribbean island nation of Antigua and Barbuda won a World Trade Organization ruling that United States legislation criminalizing online betting violates global laws. In April 2005, the WTO Appellate Body affirmed the principal conclusions involved. What effect this will have on the U.S. morality police has yet to be seen, probably none, but at least it gives the online poker players and gamblers some glimpse of hope.
Personally, I don't really care about sports betting and related things being illegal, as that isn't my area of interest. But I do see a long slippery slope ahead if things like this continue.
Source: http://www.playwinningpoker.com/online/poker/lega
The bible is an open endorsement for gambling.
If getting rich quick and love of money are sins, then certainly gambling,
which in the long run makes you poorer, is a Good Thing.
In fact the state lotteries, indian Casonos, and the online gambling sites, perform the valuable public service of sinning on our behalf, so that we all can become poorer and go to heaven.
-- Another senseless waste of fine bytes.
It's not the first time something like this has happened though. I seem to recall the FBI arresting a bunch of USAians who'd set up offshore gambling sites a while back. And if you ever had anything to do with helping to break copyright protection encryption you'd best steer clear of this country. If you've ever worked on an OSS encryption product you might want to avoid the USA, too. Never know when our guys might get a bug up their ass and arrest you as an international arms distributor or something like that.
As for the US Citizens, you ARE registering to vote and voting against the incumbent, right? Chances are the guy you're voting against is retarded. Chances are the guy you're voting for is too, but it'll be a few years before he establishes the ties to do much damage and by then you can help vote him out again.
I'm trying to teach myself to set people on fire with my mind... Is it hot in here?
Control. That's what it's all about.
--Chag
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