BetonSports CEO detained at US airport

The Judge · #1 07-17-2006, 10:37 AM

LONDON (AFX) - BetonSports PLC's chief executive David Carruthers has been detained by US federal authorities while changing flights in the US en route from the UK to Costa Rica, sending shares in online gaming stocks tumbling.

The company, which is one of the largest US and Asia-facing online gaming companies, said it is seeking clarification as to the basis of the detention. adding that a further announcement will be made 'when appropriate'.

A spokeswoman for BetonSports was unable to give further details.

'David has not had any contact with the outside world. All we know is that he was detained. Why he was detained we don't know and would not want to speculate,' she said.

Today's development follows last week's vote by the US House of Representatives to back a bill making it illegal for US-based banks and credit card firms to make payments to online gaming sites.

The bill now moves through to the US Senate where industry experts believe it has only a slim chance of being passed with the issue of 'carve-outs' (exemptions for horse racing and state-run lotteries) still an obstacle while there are only a limited number of Congressional days before the November mid-term elections.

Just last Friday, Carruthers used BetonSports' Annual General Meeting to tell shareholders the chances of the bill being passed are 'remote'.

Analysts speculated today over whether Carruthers' detention is 'politically motivated'.

'We will be monitoring this case closely as it is too early to say if this is part of a broader strategy on prevention of Internet gambling in the US or if it is the Department of Justice flexing their muscle and trying to influence legislation,' said Greg Harris, an analyst at Cannacord.

Williams de Broe analyst Nigel Parson forecast the news would 'throw online gambling stocks into a spin'.

'David Carruthers is a prominent advocate of the pro-online gambling industry and the fear that this is an escalation of the anti-lobby will trouble markets,' Parsons said.

Williams de Broe has downgraded its recommendation on PartyGaming PLC, the world's biggest online gaming company, to 'hold' from 'buy' on the back of today's news.

At 3.50 pm, shares in BetonSports were 25 pence lower at 122, with PartyGaming down 4-3/4 at 104-1/4. Other stocks in the sector were also impacted with 888 Holdings PLC dropping 8 pence to 192 and Sportingbet PLC 42-1/4 pence lower at 282.

TigerCat_Tania · #2 07-17-2006, 10:46 AM

There is always HUGE ads in the NY Times from BetonSports....
It's amazing how this is turning into a game of Dominos... A Publically traded company in the US, it's service now illegal in the US and a British CEO now detained. Who's next... so silly...