July 17, 2006
File Under "I Can't Believe This is Happening": The DOJ Arrests CEO of BetOnSports PLC While Changing Planes in Dallas
Posted by Christine Hurt

Growing up in Lubbock, the joke was that to get to heaven, you had to change planes in Dallas.  Apparently, Dallas is also the gateway to H-E-double toothpicks if you are the CEO of a successful online sports betting site that is headquartered in the UK and traded on the LSE.  On Sunday, the DOJ indicted three online betting sites and eleven individuals on charges of "racketeering, conspiracy and fraud."  Enforcing the Wire Act against online gambling sites has many problems (although most substantive problems are not present with sports betting sites, as with online casinos), the jurisdictional hurdle was jumped by arresting David Carruthers, CEO of BetOnSports, while he was changing planes in DFW on his way to Costa Rica. 

Now the puzzle is to figure out why now?  Does this new energy on the part of the DOJ spring from the House passing H.R. 4411 last week?

So, my question is this:  If millions of Americans are gambling online at offshore sites, why is this the problem of the offshore sites?  Casinos in Monte Carlo or the Bahamas attract Americans to take vacations there and visit the casinos, but we don't arrest the owners of foreign casinos should they take a vacation here in the U.S. or change planes in our airports.  Why is creating an online casino any different?  Why is the burden on the online gambling site to keep Americans out?  (Other than that burden being almost impossible to meet.)

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Comments (6)

1. Posted by Eric Goldman on July 17, 2006 @ 17:29 | Permalink

Not that it necessarily matters from a policy standpoint, but the online gambling sites enable US citizens to gamble while in the US, unlike the casinos you mention where the person is not in the US when they commit the act that may putatively violate US law. Grabbing an online CEO while in transit in the US isn't exactly new; it's happened before in a few cases. I always tell my students in Cyberlaw--if you want to build a business that breaks the US law using a website, no more vacations in US territories. Now, I'll have to add, no more plane changes on US soil! Eric.

2. Posted by Jake on July 17, 2006 @ 18:38 | Permalink

A talented lawyer I know once sought to serve civil process on an American citizen who had expatriated to Brazil for the sake of evading creditors, but retained family ties in the U.S. Somehow my friend managed to learn when the expat had scheduled one of his infrequent visits, stationed a process server at O'Hare Airport, and nailed the fellow. An admirable example of diligent lawyering that eventually brought an end to over 10 years of litigation.

3. Posted by John on July 18, 2006 @ 0:39 | Permalink

I'd suggest that it is because elements of the US legal system are out of control.

After the recent UK extradition fiasco (which is our government's fault as much as the US) I have decided that in the future I will neither visit nor do business with the USA.


4. Posted by PK on July 18, 2006 @ 8:04 | Permalink

Prof. Hurt,

If it was legal to sell heroin in Country X, a distributor from country X receives an order for heroin from an American living in the United States, and the distributor fills the order, should he be subject to prosecution if the US can get jurisdiction?

If yes, what's the difference between this situation and on-line gambling?

5. Posted by Sports Betting on February 17, 2011 @ 1:18 | Permalink

Gaming online has been widespread. Its one way or the other in gaining more friends online. I never thought about betting online, but this is such an innovative idea of playing games. This may consume less effort than watching it live. The fact that this is still gambling. I bet some kids are used to it too. They need constant precautions from guardian.

6. Posted by Poker 3D on July 11, 2011 @ 5:27 | Permalink

The perspective of 5 years after this post has been originally submitted demostrates how the legislation procedure is influenced by so many outside interests... Full Tilt Poker only recently lost their gaming license, and the relevant governing body (AGCC) has already puclicly informed that they are in negotation to re-instate Full Tilt. Money is the main driving force, as usual, behind this decision, and you shouldn't be surprised if the US legislation will be completed by early 2012. With the state of the US economy as it currently is, the temptation of adding billions of dollars in tax revenue from online gambling will be to hard to resist

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