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Written by Thomas Jensen
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Friday, 20 June 2008
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 The shell shocked internet gambling industry is one step closer to seeing the Unlawful Internet Gambling Enforcement Act disolved. On June 24, 2008, the House Committee on Financial Services will mark up legislation, H.R. 5767, that would prohibit the Department of the Treasury and Federal Reserve System from proposing, prescribing or implementing any regulations related to the current ban on Internet gambling, as required by the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA).
“Congress has studied this issue and heard from the financial services community and federal regulators that the current ban on Internet gambling is burdensome and doomed to fail. Now it is time for Congress to change course and find a way to protect the millions of Americans that are continuing to gamble online,” said Jeffrey Sandman, spokesperson for the Safe and Secure Internet Gambling Initiative.
H.R. 5767 was introduced by Reps. Barney Frank (D-Mass.) and Ron Paul (R-Texas) on April 11, 2008. The introduction followed a hearing entitled, “Proposed UIGEA Regulations: Burden without Benefit?” in the House Committee on Financial Service’s Subcommittee on Domestic and International Monetary Policy, Trade, and Technology. Reps. Frank and Paul stated in their press release accompanying the introduction of H.R. 5767, “it was clear at the hearing that the regulations are unworkable for the financial services industry, and this bill would, therefore prohibit their implementation”.
Representatives of the U.S. Department of the Treasury and Federal Reserve System acknowledged at the hearing the challenges U.S. financial institutions will face in attempting to comply with UIGEA. Testimony was also heard from representatives from the Credit Union National Association, Financial Services Roundtable, American Bankers Association and Wells Fargo & Co., who spoke about the unnecessary burden they would face given the ambiguity of UIGEA and the potential confusion with the chance of multiple interpretations of what may or may not be illegal activities.
Last year, Rep. Frank introduced the Internet Gambling Regulation and Enforcement Act (H.R. 2046) that would regulate Internet gambling. The bill requires Internet gambling operators licensed by FinCEN to put in place safeguards to protect against underage and compulsive gambling and ensure the integrity of financial transactions at the same time reinforcing the rights of States to control what, if any, level of Internet gambling is permissible within their borders..
A companion piece of legislation to the Frank bill introduced by Rep. Jim McDermott (D-Wash.), the Internet Gambling Regulation and Tax Enforcement Act of 2008 (H.R. 5523), would ensure the collection of taxes on regulated Internet gambling activities. According to a tax revenue analysis prepared by PricewaterhouseCoopers, taxation of regulated Internet gambling is expected to generate between $8.7 billion to $42.8 billion in federal revenues over its first 10 years.
The Safe and Secure Internet Gambling Initiative promotes the freedom of individuals to gamble online with the proper safeguards to protect consumers and ensure the integrity of financial transactions. For more information on the Initiative, please visit www.safeandsecureig.org. The Web site provides a means by which individuals can register support for regulated Internet gambling with their elected representatives. |
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Written by Thomas Jensen
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Tuesday, 20 May 2008
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 The World’s biggest iGaming congress provides more conference and expo hours for EiG 2008. Clarion Gaming, organisers of the European iGaming Congress & Expo (EIG), has announced the schedule for this year’s show which includes new features, more content and greater networking opportunities for delegates.
For the first time in its seven year history, EiG – the world’s largest iGaming congress - will see the expo and conference run throughout “Day Two”, giving an extra three hours for delegates to learn more about the topical issues surrounding their industry from some of the online sector’s most prominent speakers.
One of the many new features is the introduction of a workshop to be hosted on the morning of “Day One”, plus three days of free seminars within a specially built theatre located on the exhibition floor.
There will also be more places for delegates to meet, greet and relax with Clarion planning an unrestricted catering area together with various “Networking Zones” scattered around the show floor, therefore offering further opportunities for business meetings during expo times.
True to tradition, Clarion will kick off this year’s EiG 2008 in style with its annual Expo Opening Drinks. Renowned for its valuable networking, Clarion will also be hosting the EiG Official Party at a fabulous beach-side venue, and a fun Football Tournament. Each delegate will also receive a comprehensive guide to Barcelona offering a great selection of restaurants, bars and clubs to keep visitors entertained late into the night.
Gigi Levy, CEO at 888.com said “It’s clear to me that EiG has become the leading forum and marketplace for our industry. This annual gathering is where I can count on meeting the people I really need to see to further my business.”
“You spoke and we listened,” said Sue Schneider of Clarion Gaming. “We’ve been getting lots of feedback over the past six months on how to make EiG even better this year and have made a variety of changes and additions to meet your needs. A tighter and more interactive conference programme, extended expo hours, free seminars, extra networking areas and an “Affiliates Zone” are just some of the new features this year.”
EiG will take place on the 23-25th September 2008 and registration is now open. Click here EiG 2008 to find out more and book before 25th June to receive the “Early Bird” discounted rate. The website also offers more news on the conference programme, exhibition and new features as they are announced over the coming months.
Clarion Gaming is the first choice provider of quality information, events and services to the global gaming, gambling and betting industries. It is dedicated to supporting the industry - whether traditional or new, supplier or buyer, trade association or government department. Clarion Gaming’s ongoing goal is to maintain its position of leadership both within the industry and in representing the industry to the business community at large, providing world class customer service in the process. |
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Last Updated ( Tuesday, 20 May 2008 )
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Written by Thomas Jensen
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Monday, 12 May 2008
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 Maximize marketing efforts, attract customers, build player loyalty and cement brand identity through new media-channel development. Exploring North American regulations and advances in technology are the main focal points of the Next Generation in Gambling event produced by Clarion Gaming. This exciting new conference will be held July 29 & 30, 2008 at the Palais des Congres in Montreal, Canada.
Filled with information and networking opportunities for gambling professionals, NGG will educate participants about the legal climate for online distribution of pay-to-play games and lotteries. It will also explore multi-channel strategies, introduce new technologies, and show attendees how to increase earnings and player loyalty.
This conference is designed around companies that serve the regulated gaming market and are looking to grow their business via multi-channel development. It is a how-to on implementation and navigating the legal landscape so as to keep within compliance parameters in North American jurisdictions, from both the federal and state levels. Dedicated sessions will be spread across two tracks, Technology and Legal Developments.
NGG is the ideal venue for any gambling company working in the U.S., Canadian, and Latin American markets, where the implementation of next-generation strategies is crucial to long-term success.
Among several high-profile speakers, Hon. Alfonse D'Amato, the current Chairman of the Poker Players Alliance and former New York Senator, will discuss U.S.-focused legal initiatives and lobbying policies. Other confirmed speakers include Chris Collins of Second Life (Linden Lab), Dr. Jeffrey Derevensky of McGill University, Tony Fontaine, CEO of ProPickRacing.com, and Shawn Kreloff, CEO of Sona Mobile.
"It is important for the industry to know what the legal possibilities are at this point and what they will be in the next couple of years. There's a lot of revenue being left on the table," observed Sue Schneider, CEO of Clarion Gaming, Americas. "NGG aims to provide insight into legal grey areas and present case studies of technologies available that address certain legal requirements in North American markets."
To register or for more information visit: www.nextgenerationingambling.com. |
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Last Updated ( Monday, 12 May 2008 )
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Written by Thomas Jensen
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Thursday, 08 May 2008
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 With efforts in Washington underway to overturn the Unlawful Internet Gambling Enforcement Act, I decided to look at the state of the industry after what has been the most challenging 18 months in the history of online gambling. The most current United States internet gambling witch hunt started when former BETonSPORTS CEO David Carruthers was picked up by the Feds on July 17th, 2006.
The United States Attorney for the Eastern District of Missouri office, citing the outdated Federal Wire Act of 1961 that was enacted before the internet existed which prohibits the use of a wire communication facility to transmit bets across state or foreign borders, issued a 22 count indictment for David Carruthers, Gary Kaplan, Norm Steinberg and five others. The various charges in the indictment included Racketeer Influenced and Corrupt Organizations Act, interstate transportation of gambling paraphernalia, interference with the administration of Internal Revenue Service laws and tax evasion.
Carruthers currently sits in a cushy St. Louis Hotel Room awaiting trial, unlike BETonSPORTS Founder Gary Kaplan and partner Norman Steinberg. Kaplan was a fugitive for nine months until he was captured in the Dominican Republic and extradited back to Missouri where he sits in a cell awaiting trial after his bail request was denied. Steinberg is hiding out in Costa Rica and has thus far successfully evaded US Authorities. These guys are far from victims of the United States Department of Justice, and more specifically, David Carruthers is the poster child and the very reason why the United States should regulate and tax internet gambling.
David Carruthers was single handedly responsible for the implosion of BoS and his actions alone reignited the heat on the entire internet gambling industry in 2006. While Carruthers pushed for regulations in the United States as the CEO of BETonSPORTS, what ultimately did him in was his own ego and greed. David’s practice of deceiving everyone in the end victimized everyone including all of his employees, all of his players, the government of Antigua, his own board of directors (who had to clean up the mess as best they could once things started to implode), his shareholders, Kaplan and ultimately the entire online gaming industry.
Carruthers was wandering around accusing other well margined organizations of being over leveraged at the same time as he was running his group way more over leveraged. That is not only deceitful to his players, investors, regulators, the exchange, the media, the industry and his own employees but ultimately was the cause of the calamitously swift implosion when David was picked up by the Feds in the first place.
Some stupid things David Carruthers did as CEO of BETonSPORTS include:
1.) Maintained large credit betting accounts which had no likelihood of ever being settled and which most likely were kept to give illusion of higher financial performance, including business which were for the sole benefit of parties related to the founders. The ongoing inflation of results is illustrated by the profit warning immediately following the BETonSPORTS IPO.
2.) Bought assets such as VO Group, EasyBets and Hooball to give bump to the stock. These acquired assets were perceived as reasonable value by the shareholders and advisors at the time of the transactions but after closing on the deals Carruthers blocked attempts by his management team to fully integrate and control them thus failing to achieve the best value for shareholders.
3.) Siphoned money out of deals into his own pockets which in hindsight seems to be the real reason for the acquisitions in the first place. Point-Spreads.com sources in Costa Rica indicate that several shell entities controlled by David Carruthers were used to pay out ad deals and to settle financial matters of subsidiaries of BETonSPORTS.
4.) Overpaid for marketing prior to the arrival of the management team imposed on him by the non-executive directors of BETonSPORTS following the profit warning. It was the new management that brought in a strong internet and complete marketing strategy.
5.) Arrogantly poked powers that be in the United States that he was invincible going so far as to challenge politicians to debate the subject of regulated internet gambling on live TV. The industry and BoS would have been better served if he had kept his head down and swallowed his ego and allowed his management team to continue their drive to turn BoS into a first class operation.
6.) Failed to disclose all the risks and issues to the market at IPO. The vast majority of indictments against BoS are pre – IPO. Why did David fail to disclose or deal with the situations? Was Carruthers so desperate that he hid the truth?
7.) Failure to disclose to his colleagues that there was an ongoing Grand Jury investigation into BoS and failing to have any strategy to deal with it.
8.) Misled the Antiguan Government and regulatory body as to the health of BoS, causing them undeserved embarrassment and loss of credibility and now basing his defense on their case with the WTO.
9.) Took a flight through the US and visited the US regularly to meet with individuals being interviewed by the Federal Grand Jury thinking he was above the law. The worst part about this is that Carruthers did not have a strategy in place to deal with any potential fall out.
Despite all of the above listed stupidity, Carruthers was close to getting away with it, if he had had more time as the management team beneath him had almost exorcised all the demons and started to rebuilt a solid reputation and received the begrudging respect of its peers. Sadly the same management were left holding the crying baby when Carruthers final act of stupidity brought down the house of BoS. BoS directors Clive Archer and Richard Creed have taken the brunt of the blame for the downfall of BETonSPORTS when it is clear to Point-Spreads.com now that they were the good guys all along in this sordid tale. Both continue to work unpaid to try and recover funds so that players and staff will see some of their money back.
If David Carruthers was set free tomorrow, his troubles would just be getting started. While some in the online gambling industry might consider welcoming him back with open arms, David will have to worry about settling up with angry sports bettors, his former staff in Costa Rica and regulators in Antigua assuming he escapes the grasp of the DoJ. For starters, if Carruthers is able to get out of his legal situation in the United States, he will have to explain to regulators what happened to BoS's Asia Business assets after he was arrested.
Apparently the shell corporations and subsidiaries that were set up to act as intermediaries between BoS PLC and Easy Bets were actually controlled by Carruthers and these entities stopped generating revenue for their parent company upon David’s arrest. Where did all that money go?
Who is bankrolling Carruthers legal defense and pricey hotel stay in Missouri? I am sure BoS players and employees sure want to know the answer to that question. It is estimated that BETonSPORTS owed $12 million in player deposits, owes employees in Costa Rica close to $6 million and is owed in excess of $10 million from third parties predominantly payment processors who are doing everything they can to avoid repayment. One such processor has been heard at trade shows bragging he bought his $2 million house in Germany with BoS Money. Point-Spreads.com sources in Central America have indicated that Carruthers is currently being bank rolled by the founder and CEO of Easy Bets, Tim Lambe.
In the end, Carruthers apparently lied to everyone about the solvency of BoS. David Carruthers should have had all the players money and then some in the bank, especially since the internet gambling industry was running in its sweetest cycle ever when he was arrested in Dallas. The internet gambling industry needs to shake away its shady roots and in many ways the destruction of the once mighty BETonSPORTS Group can serve as the industries donation or symbol to that cause. |
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Last Updated ( Thursday, 08 May 2008 )
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Widely recognized as the largest most successful sportsbook on the web and trusted for its up to the minute odds on sports, politics, pop-culture and more, BetUS.com announced today that the new BetUS Partners "Internet Poker Affiliate Program" is now live! The poker program has been fully integrated into the BetUS.com Partners site and can be found at