JURIST - Paper Chase: Federal indictment of online gambling outfits announced

[JURIST] BetOnSports PLC [corporate profile] and its chief executive are among four corporations and 11 individuals indicted by a federal grand jury in St. Louis on charges of racketeering, conspiracy and fraud for allegedly accepting illegal sports bets online. The indictment, returned on June 1 but only unsealed Monday, also alleges that BetOnSports founder Gary Stephen Kaplan failed to pay federal excise taxes on more than $3.3 billion in wagers by US customers. The indictment was released after BetOnSports Chief Executive David Carruthers was arrested [Star-Telegram report] during a layover at Dallas/Fort Worth Airport. In a US Justice Department (DOJ) press release [text], Catherine L. Hanaway [official profile], US attorney for the Eastern District of Missouri, said:

Illegal commercial gambling across state and international borders is a crime. Misuse of the Internet to violate the law can ultimately only serve to harm legitimate businesses. This indictment is but one step in a series of actions designed to punish and seize the profits of individuals who disregard federal and state laws.

In a related civil suit filed Monday, the DOJ is seeking the forfeiture of $4.5 billion by the corporate defendants. In that case, US District Judge Catherine Perry [official profile] ordered BetOnSports yesterday to return bets placed by US gamblers and to inform them that they are entitled to refunds.

Last week, the US House of Representatives voted to effectively ban most Internet gambling [JURIST report] by prohibiting people from using credit cards and other forms of Internet payments to settle Internet bets, and allowing law enforcement and Internet providers to block access to gambling websites. AP has more. The St. Louis Post-Dispatch has local coverage.

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