The founder of a multi-billion pound online gambling business has been arrested in the Dominican Republic and faces extradition to the US under a new anti-gambling law. He will also face trial on outstanding charges that pre-date that law.
Gary Kaplan was a New York bookmaker who went on to found BetOnSports, a successful online gambling company based in the UK. BetOnSports' chief executive, David Carruthers, was arrested last year in the US while changing planes.
Carruthers was arrested under the 1961 Wire Act which prohibited inter-state telephone betting, a law that the US Department of Justice claims also stretches to include cross-border internet betting.
Since then the US has passed a law specifically outlawing online gambling. The Unlawful Internet Gambling Prohibition (UIGP) Act was opposed in the Senate on its own merits but was passed just before a deadline for legislation as an addition to a ports security bill that was certain to be passed. That Act makes it illegal for financial organisations to process internet gambling transactions.
Kaplan has been wanted in the US on racketeering charges and since the passing last autumn of the UIGP Act he is likely to face charges under that legislation.
Kaplan was based in Costa Rica, which does not have an extradition agreement with the US. He became famous for his colourful lifestyle and for the lavish parties he hosted for large stake gamblers.
His arrest was a joint operation by Dominican Republic police and the US FBI. Kaplan was deported to neighbouring Puerto Rico, a US territory, where he will face a US judge.
Prosecutors in St Louis, where Carruthers is being held, allege that BetOnSports accepted $3.5 billion worth of illegal bets from US gamblers.
The US was censured this week by the World Trade Organisation, which ruled that the US broke free trade rules in banning online gambling processing abroad. It said that the US had failed to amend its laws to bring them into line with agreements to which it had signed up. The case was brought by Antigua and Barbuda.