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Article Date: 02/08/2006
Article Title: Gambling arrest not news
There has been a lot of press in the UK recently about the arrest, imprisonment and subsequent dismissal of the Chief Executive of UK internet bookmaker Betonsports David Carruthers but is the arrest really news?
In October 2001 we reported on e80 on the difficulties faced by one UK based website allowing people in the US to bet online through its site.
This case, like Betonsports, involved the personal prosecution of an individual accused of being involved in an offshore internet sports gambling operation. The individual concerned, Jay Cohen, was President of the World Sports Exchange (WSE). WSE's exclusive business involved bookmaking on American sports events. WSE targeted customers in the US to bet with WSE online or by using the equivalent of an 0800 number. FBI agents in New York contacted WSE over the Internet and placed bets. Cohen was subsequently arrested in March 1998 and charged with multiple federal criminal violations. He was then sent for trial, convicted and sentenced to a prison term of 21 months.
The Betonsports case seems pretty similar in many respects. What is different perhaps is the publicity the case has attracted and the heightened awareness of the long-reach of US courts following the extradition of the NatWest Three.
The advice we gave 5 years ago on e80 was "The case again shows us of the need to do a proper risk assessment with any online venture" - Betonsports have claimed that they did this - only time will tell whether their due diligence was sufficient.
Jonathan Armstrong
Senior Associate
Eversheds LLP
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