BetonSports.com has released statements to the London Stock
Exchange, where its shares are listed, distancing current
management from the scandal-hit founder and the chief
executive.
British businessman David Carruthers was arrested in Texas last
week as he changed plane to go to Costa Rica. He remains in jail on
charges related to his heading of the online betting company.
Online betting is illegal in the US under the 1961 Wire Act and a
further piece of legislation outlawing the use of credit and
payment cards for online gambling is awaiting Senate approval.
"Clearly while he remains in the custody of the US government he
is unable to perform his duties," the company was widely reported
to have said in a statement. The removal of Carruthers was "as a
consequence of [his] continued detention by US authorities," it
said.
The company has also moved to disassociate itself from its
founder, Gary Kaplan. Weekend newspaper reports recounted
allegations that the company had held wild parties at its Costa
Rican base involving prostitutes and that it encouraged gamblers to
spend when they said they could not afford it. The Mail on Sunday
quoted sources alleging that Kaplan was a key organiser of the
parties.
"The Board wish to make absolutely clear that none of the
founders of the original business has any continuing role within
the Company," said a BetonSports.com statement to the London Stock
Exchange.
"As disclosed in the AIM [pre-flotation] document, the original
founder has a consulting agreement with the Company under which his
role is non-management related which was an absolute requirement of
the Board for the float and thereafter," it said.
The company shares were suspended on Carruthers' arrest last
week. The company was bought by its present owners just before the
July 2004 float, it claimed. "Other than David Carruthers the Board
of directors, both executive and non-executive directors, was
appointed at or subsequent to the float and are not named in the
indictment."
The legality of online betting in the US has never been entirely
clear cut, which is a situation the new planned legislation hopes
to address. It has been passed in the House of Representatives and
must now be passed in the Senate before it can become law.
The $12 billion a year online gambling industry is said to earn
around half of its revenue in the US. Since Carruthers's arrest net
betting shares have tumbled; in the days after the arrest the
firm's rival PartyGaming saw its shares drop by 17%.
