FBI Detains Online Betting Boss on Airport Runway

The boss of online betting group BetonSports was detained at an airport early yesterday morning by the FBI after he touched down in the US on his way from Britain to the company's main operational base in Costa Rica.

The company, which is listed in London, issued a short statement saying the board was seeking clarification as to the basis of detention. Meanwhile, investor fears that the move marked the start of a broader crackdown on internet gambling, judged to be illegal by the US justice department, sent shares in several online operators plunging.

BetonSports fell 23p, or 16%, to 122.5p and Sportingbet lost 42.25p to 282p. PartyGaming, which does not take sports bets, was down 13p to 96p in early trading, but recovered to end the day down 6p at 103p. These are among several offshore companies to have floated in London in recent years that make a lot of their revenues from American gamblers - though they operate from bases outside the US.

A spokeswoman for BetonSports said the firm's chief executive, David Carruthers, 48, was detained, along with his wife Carol, at a US airport at 11pm local time by the federal authorities. Mrs Carruthers has since flown home to Britain. Last night the spokeswoman said BetonSports had still not heard from Mr Carruthers. A justice department spokeswoman had no comment.

The department has repeatedly said it regards online betting - including sports betting and gaming - as an illegal activity under the Wire Act, the wording of which prohibits wagers on "sporting events or contests". Many businesses, particularly online gaming operators, take issue with this position and point to a federal appellate court judgment in 2002, known as the Mastercard ruling, which states: "The Wire Act does not prohibit non-sports internet gambling."

BetonSports and its much larger rival Sportingbet operate sports betting as well as casino and poker websites targeted at the US market.

Last night, asked if Sportingbet directors would continue to travel to the US in the light of Mr Carruthers' detainment, a spokesman said: "We are monitoring the situation closely." Chief executive Nigel Payne, who visits the US on a monthly basis, was on holiday yesterday and unavailable for comment. The spokesman confirmed he was not staying at his Florida home or anywhere in the US.

Mr Payne is due to step down as chief executive in October in order to focus on lobbying activities for the group, particularly in the US. He will remain on the board of Sportingbet, which makes 65% of its revenues from the US.

A bill designed to tighten US law on online betting was passed by the House of Representatives last week and has been handed to the Senate.

Mr Carruthers is among those who played down the likelihood of the bill's becoming law. Last week he told the company's annual shareholder meeting its chances were "remote".

One reason he and others believe the bill is destined to fail is the exemptions, known as "carve-outs", that have been secured for the established internet activities of licensed horse racetrack bookmakers and state lotteries.

Two years ago BetonSports shares collapsed after it underestimated difficulties in placing advertising in the US and was forced to slash its spending after several radio stations declined to run the firm's ads. The move followed a round of subpoenas fired off to media firms by the justice department warning them they could be aiding and abetting a federal criminal offence.

Many media groups, including Google and Yahoo!, stopped taking advertising from online operators, but publicity is still widespread. Sportingbet has had a large billboard promoting its SportsBook.com website in Times Square, New York, and last year sponsored a horse in the Kentucky Derby.