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.
