Cassimer Medford, The Red Herring
September 20, 2006

The level of uncertainty in online gaming continued to grow as a lawyer representing BETonSPORTS, the embattled gambling site, told a U.S. district court judge that it is still sorting out the charges leveled against the company.

In the meantime Bodog.com, a popular online gambling site, cited industry uncertainty as the reason for the cancellation of the marketing conference it scheduled for the Bahamas in December.

A lawyer representing BETonSPORTS told Judge Carol Jackson in the U.S. District Court in Missouri on Tuesday that the company is interested in negotiating a settlement on the charges of fraud and racketeering it faces.

The court extended its ban on BETonSPORTS taking wagers in the United States for another 30 days.

But industry insiders are bristling at what many consider the capitulation of BETonSPORTS in the face of the arrest of its former CEO David Carruthers, and the charges faced by the firm.

Robust Defense Needed

Many in the industry were hoping to see BETonSPORTS mount a robust defense that could help sort out some of the legal and jurisdictional issues behind the uncertainty in the industry.

In fact Bodog founder Calvin Ayre expressed the belief that the recent detainment and possible prosecution of Peter Dicks, the chairman of Sportingbet, was a sort of blessing in disguise (see Second Gambling Exec Nabbed).

“Sportingbet will likely mount a formidable defense to this and in the medium term this will be good in the higher level of certainty this will provide over what the rules are in this area,” Mr. Ayre said.

Mr. Dicks, who was wanted for illegal gambling by the state of Louisiana, was released by a New York City court and allowed to travel back to the United Kingdom (see Gambling Exec Fights Extradition and Online Gambling Exec Freed).

Other industry insiders have expressed alarm at the fact that BETonSPORTS has failed to return customer deposits that have been estimated at anywhere between $2 million and $15 million (see BETonSPORTS Mum on Deposits).

“BETonSPORTS is using the charges hanging over its head to hold on to that money,” said Christopher Costigan, president of Gambling911.com, a gambling research and marketing firm.

Customer deposits—funds that have not been wagered—are not owned by the gambling site so they should not be commingled with its gambling revenue, Mr. Costigan said.



Industry on Hold

The arrest and detention of both Mr. Carruthers and Mr. Dicks have put many of the industry’s crucial marketing events on hold.

Travel has become a dangerous adventure for industry executives. Bodog’s cancellation of its December event is rapidly becoming the norm for the embattled industry.

“With all the attention our industry has garnered in recent months by certain officials within the U.S. government, a number of speakers and attendees have communicated their apprehension about participating in an industry event of such magnitude,” Mr. Ayre said in a statement.

“It is in light of these concerns and with the best interest of all delegates in mind, that our decision to not proceed with the conference was made,” he concluded.