CEO of BetOnSports sentenced to 33 months in prison

January 8, 2010

It´s been a bad couple of months for the former online gambling site BetOnSports, which ran a large part of its operations from a location in Costa Rica´s Mall San Pedro, east of San José.

On Friday, former CEO of the company David Carruthers was sentenced to 33 months in a federal prison after pleading guilty to racketeering charges in a U.S district court in St. Louis, Missouri, in the United States. In November, the founder of BetOnSports, Gary Kaplan, was sentenced to 51 months in federal prison for violation of the U.S. Federal Wire Act, which prohibits wire transmissions of foreign commerce earned as a result of betting on sporting events, and in December, BetOnSports was fined $28 million for its illegal operations and failure to pay money owed to U.S. gamblers.

BetOnSports, which was founded in 1995 by Kaplan, became one of the largest online sports gambling Web sites during the early 2000s. In 1997, the company moved operations to Costa Rica and by 2004 employed an estimated 1,700 people at the San Pedro location. During its peak year in 2004, BetOnSports raked in an estimated $1.25 billion with 98 percent of its customers based in the U.S. That year, the company also entered the London Stock Exchange Alternative Investment Market (AIM), where it was publicly traded until 2006.

But things turned ugly fast for the online giant, and, after extensive investigation by the U.S. government, the company was indicted in 2006 on charges of mail fraud, tax evasion and the Racketeer Influenced and Corrupt Organizations Act (RICO). Shortly after the charges, Carruthers was arrested in 2006 and Kaplan in 2007. The company suspended its U.S. operations after Carruthers´ arrest and has since folded.

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