The British chief executive of a London-listed betting firm will stay in a Dallas jail after pleading not guilty to a series of charges. David Carruthers said he was not guilty of racketeering and committing mail and wire fraud in a Missouri court room.
Carruthers was chief executive of BetOnSports.com when he was arrested in Dallas on 16th July on his way from the UK to the company's base in Costa Rica. He has been in jail since then awaiting trial. Following his arrest, BetOnSports sacked him and agreed to stop taking bets from US citizens.
Carruthers is accused with several other BetOnSports employees with violating US laws which outlaw telephone and internet gambling. The government's case claims that the firm fraudulently took billions of dollars in bets and did not pay taxes on the wagers.
BetOnSports was founded by Gary Kaplan who has not been arrested and who lives in Costa Rica. A warrant for his arrest has been issued.
In a related case another judge extended a temporary restraining order preventing BetOnSports from doing business in the US. BetOnSports did not send a legal team to represent it in the US. Prosecutors are seeking to have the court extend the ban on BetOnSports's business indefinitely.
US gambling laws are complicated and far from clear. Most prosecutions come under a 1963 Wire Act which prohibits inter-state telephone betting. A law from the 1970s specifically legalises inter-state horse race betting, though prosecutors sometimes still take cases involving horse racing.
A new law which seeks to clear up the situation is passing through the two legislative houses of the US but its passing into law is far from certain.
Carruthers is seeking $1 million bail, which has not yet been approved. If permitted, the bail conditions are said to be likely to include the demand that he remain in the St Louis area and wear an electronic tag.
The US government is seeking to take possession of $4.5 billion worth of assets, including cars and computers, from the defendants. Other defendants include Neil Kaplan and Lori Kaplan Multz, relatives of company founder Gary.
BetOnSports has sought to distance itself from the scandal by sacking Carruthers and emphasising to the London Stock Exchange, where its shares are listed, that Gary Kaplan has no management role in the company any more. Kaplan is a consultant to the firm, it said.