Posted 8/27/2006 9:07 PM
By Jon Swartz, USA TODAY
SAN FRANCISCO ? Americans continue to gamble in record numbers online, but executives of the offshore operations that take those bets are exercising caution weeks after one of their peers was arrested in the USA.
The trepidation of online-betting executives underscores growing concern that the U.S. government could target more offshore firms after essentially giving the industry a free pass for several years, gambling experts say.
"(Operators) are playing a wait-and-see policy to see what the feds manage to pin on (indicted gaming site BetOnSports.com)," says Simon Holliday, a partner at Global Betting and Gaming Consultants in the UK. "Although the sports books give the impression they are not too concerned, I don't see them rushing to be in the U.S. now."
The actions by some gaming executives hardly constitute a self-imposed shutdown of some 2,300 gaming sites worldwide. But they reflect an undercurrent of concern, especially for sports-betting sites, gambling experts say.
London-based Ladbrokes, the world's biggest bookmaker, last week said it is reviewing plans to take bets from Americans on its gaming sites, something it currently does not do. It cited uncertainties in the U.S. market.
Online gamer Bodog.com canceled a marketing conference in Las Vegas this month, shortly after the arrest of David Carruthers, the former CEO of BetOnSports.com. Carruthers was charged with violating the 1961 Wire Act. BetOnSports has stopped taking U.S. bets, a majority of its business.
"Any executive that has anything to do with online gaming, no matter how minor, has got to be apprehensive about setting foot in the United States," Bodog.com CEO Calvin Ayre said in an e-mail. Bodog is based in Costa Rica.
Established offshore operators, such as PartyGaming, that have recently acquired sports-betting sites are emphatic in saying that they won't take U.S. bets.
"The Justice Department is waging a war of intimidation, and it is working in terms of scaring some operators," says Nelson Rose, a professor at Whittier Law School.
Before Carruthers, the last significant arrest of an offshore Internet gaming executive was Jay Cohen. In 2001, he was sentenced to 21 months in federal prison, and served more than a year.
Officials at poker sites aren't as nervous, because the Justice Department has not pursued actions against them as vigorously as sports operators, Rose and others say. PokerStars.com, among others, hosted events at the World Series Of Poker in Las Vegas in early August, shortly after Carruthers' arrest.
Still, 24hPoker in Sweden says it will exclude American players. Despite the case against BetOnSports, viewership for large sites such as PokerStars have increased. It drew 1.2 million unique visitors in the USA for the week ended Aug. 13, up 41% from a month earlier, according to Nielsen/NetRatings.
By Jon Swartz, USA TODAY
SAN FRANCISCO ? Americans continue to gamble in record numbers online, but executives of the offshore operations that take those bets are exercising caution weeks after one of their peers was arrested in the USA.
The trepidation of online-betting executives underscores growing concern that the U.S. government could target more offshore firms after essentially giving the industry a free pass for several years, gambling experts say.
"(Operators) are playing a wait-and-see policy to see what the feds manage to pin on (indicted gaming site BetOnSports.com)," says Simon Holliday, a partner at Global Betting and Gaming Consultants in the UK. "Although the sports books give the impression they are not too concerned, I don't see them rushing to be in the U.S. now."
The actions by some gaming executives hardly constitute a self-imposed shutdown of some 2,300 gaming sites worldwide. But they reflect an undercurrent of concern, especially for sports-betting sites, gambling experts say.
London-based Ladbrokes, the world's biggest bookmaker, last week said it is reviewing plans to take bets from Americans on its gaming sites, something it currently does not do. It cited uncertainties in the U.S. market.
Online gamer Bodog.com canceled a marketing conference in Las Vegas this month, shortly after the arrest of David Carruthers, the former CEO of BetOnSports.com. Carruthers was charged with violating the 1961 Wire Act. BetOnSports has stopped taking U.S. bets, a majority of its business.
"Any executive that has anything to do with online gaming, no matter how minor, has got to be apprehensive about setting foot in the United States," Bodog.com CEO Calvin Ayre said in an e-mail. Bodog is based in Costa Rica.
Established offshore operators, such as PartyGaming, that have recently acquired sports-betting sites are emphatic in saying that they won't take U.S. bets.
"The Justice Department is waging a war of intimidation, and it is working in terms of scaring some operators," says Nelson Rose, a professor at Whittier Law School.
Before Carruthers, the last significant arrest of an offshore Internet gaming executive was Jay Cohen. In 2001, he was sentenced to 21 months in federal prison, and served more than a year.
Officials at poker sites aren't as nervous, because the Justice Department has not pursued actions against them as vigorously as sports operators, Rose and others say. PokerStars.com, among others, hosted events at the World Series Of Poker in Las Vegas in early August, shortly after Carruthers' arrest.
Still, 24hPoker in Sweden says it will exclude American players. Despite the case against BetOnSports, viewership for large sites such as PokerStars have increased. It drew 1.2 million unique visitors in the USA for the week ended Aug. 13, up 41% from a month earlier, according to Nielsen/NetRatings.
