Sources close to BETonSPORTS have told Point-Spreads.com that the the company had a $30 Million dollar Line of Credit going into July 2006. The company used their available cash to secure advertising deals for the upcoming football season and for acquisitions and was relying on the Line of Credit to bankroll the company going into football season.
After the arrest of David Carruthers took place on July 17th, 2006 a federal judge granted the temporary restraining order and the bank canceled the Line of Credit. This put BETonSPORTS in a situation where they could not meet their financial obligations to both employees and players alike. The same source revealed that several payment processors were holding on to millions of dollars in BoS player deposits refusing to return the funds out of fear of violating the temporary restraining order.
The BoS management team tried in vain to collect on all “paid in advance” advertising deals that the company secured before the arrest of Carruthers, however it is not known how much money, if any, was returned by advertising outlets.
All this points out is that the BoS management team was caught with their pants down. Incompetent and arrogant? Yes. Thieves? No. This information partially explains why the company was forced to shut down entirely. If they had cash available, perhaps they could have stayed open for business and fought the charges. We will never really know the answer to that question.
BETonSPORTS was not the only online gambling operator having trouble. Another source close to Point-Spreads.com revealed that BetCorp (Parent Company of WWTS) was in a similar cash crunch situation when they voluntarily ceased accepting bets from US residents on October 13th, 2006 after the passage of UIGEA (Unlawful Internet Gambling Enforcement Act of 2006). President George W. Bush eventually signed UIGEA into law in November 2006.
The source went on to state that publicly traded BetCorp did not have enough cash on hand to pay out their US client base so they were forced to stop processing payouts and deposits to US residents while they aggressively sought out an acquirer. Unlike BoS, BetCorp was not being held hostage under a federal restraining order. On the contrary, BetCorp had a stellar payout reputation and a multi-currency e-commerce platform that would be valuable to another operator trying to penetrate Non-US markets.
Along came Calvin Ayre and the cash flushed Bodog Entertainment Group. Bodog was primarily a US facing operation so BetCorp was an attractive acquisition target for Ayre. In retrospect, Ayre probably overpaid a bit for BetCorp’s assets but there is no doubt the US players of BetCorp were happy he stepped up to the plate.
Unlike the positive conclusion for BetCorp players, BoS players are still waiting with no end in sight. As time goes on, the chance of BoS repaying their players diminishes. The lesson players should learn from the events that have transpired in the online gambling industry over the last 6 months is simple: Only keep what you can afford to lose offshore and not a penny more!
One such angry BoS player named Dave S. from Alabama sent three threats to BETonSPORTS recently. Here is an excerpt from one of the threatening emails:
This will be my last email to you scumfu*ks, next time you here from me it will be in person wit my 9 pointed at your head, in 3 weeks if I'm not counting my cash I will be on the road wit my 8 soldiers, we will not rest until justice is served, that’s a lot of body bags. Test me I'm begging you 2, you think this is just empty threats, that's what I want you to think, when me or one of my troops is standing over you in the middle of the night maybe you'll realize this wasn't a game. This ain't a fu*ken jokin matter. Hope you all sleep well at night. I will take you all to fu**en hell wit me. You will not just die you will suffer first. Have a nice day:)
