Arrests Send Online Gambling Industry Into Turmoil


The multibillion-dollar online gambling industry was thrown into turmoil Tuesday after the United States government arrested a top executive from a London-based betting company, leaving his competitors wondering whether they could be next, reports the New York Times. Stock prices of the industry's biggest names, including PartyGaming and SportingBet, plummeted on fears that they could fall under the Department of Justice's spotlight next after prosecutors in St. Louis charged the London company, BetOnSports, with criminal racketeering and wire fraud.

In addition to arresting the chief executive of BetOnSports, David Carruthers, when he touched down in the United States on a flight from Britain to Costa Rica, prosecutors charged the company and 10 others who worked with the company. Investors and executives are concerned that the charges reflect a new get-tough posture on the part of prosecutors as well as legislators. The House of Representatives passed a bill last week that would ban Internet gambling sites from knowingly accepting money from United States citizens. “This is clearly sending a message that Washington is paying attention,” said the president of one industry research company.


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