Canadian Internet casino CEO says industry not threatened by U.S. crackdown

Tuesday July 18, 2006

Canadian billionaire Calvin Ayre, founder and CEO of Internet casino Bodog.com, said the arrest of a U.S. online gambling executive will not threaten his industry and his business will operate as usual.

But the U.S. crackdown on online gambling prompted concern Tuesday among government officials in Antigua, which has become an offshore haven for the industry. U.S. officials charged 11 people Monday, including BetOnSports CEO David Carruthers, with conspiracy, racketeering and fraud for taking sports bets from U.S. residents.

Sunday's arrest in Texas of Carruthers could appear "ominous" to other businesses "but that is not the case at all," Ayre said in a statement Tuesday.

"The charges are specific to the person and company at issue and has nothing to do with Bodog.com's current or previous business practices," he wrote.

The 44-year-old Ayre, of Lloydminster, Sask., who is listed by Forbes magazine as one of the 1,000 richest men in the world, lives part-time in Costa Rica, where his private company is based.

In his statement, he defended Bodog Casino, saying it has "an innovative and different business model that allows us to run our entertainment enterprise within the laws set out in each of the jurisdictions where we conduct our business.

"Bodog.com will continue to carry on its business as usual and our organization is confident the U.S. government's actions will have no impact on our operations," he added.

In March, police searched Ayre's home on the outskirts of San Jose, not long after he was profiled by Forbes, apparently because they suspected him of holding a poker tournament in violation of Costa Rican law. Ayre denied any gambling and the case was dropped.

Carruthers was arrested at the Dallas-Fort Worth International Airport as he awaited a flight to Costa Rica, where BetOnSports also has operations. He and 10 others face charges of conspiracy, racketeering and fraud in taking sports bets from U.S. residents.

U.S. authorities said an arrest warrant also was issued for company founder Gary Stephen Kaplan, who has been indicted on 20 felony counts. The government is seeking the forfeiture of $4.5 billion and various properties from Kaplan and his co-defendants.

A federal court also issued a temporary restraining order Monday to prevent BetOnSports from accepting bets in the United States, which is reported to be the company's biggest market.

Meanwhile, Antiguan Finance Minister Errol Cort said his Caribbean country would closely monitor the legal action against BetOnSports PLC and the 11 people indicted in the United States.

"This is of major concern to us," Cort said Tuesday during a break in a government economic forum.

"This could have implications on individuals who are doing business in Antigua."

The two-island country Antigua and Barbuda has licensed 30 online gambling firms, including BetOnSports, and has welcomed the industry as a way to diversify its economy.

Antigua has filed a challenge against U.S. restrictions on online gambling with the World Trade Organization.

Costa Rica has scores of "sports books," which Eduardo Agami, president of the Costa Rican Association of Electronic Gambling Businesses, said employ 8,000 workers, mostly young university students.

"We are not illegal, nor are we casinos," Agami told the Costa Rican daily newspaper Al Dia recently.

"We are a technological service."

Agami could not be reached for comment Tuesday.