Online-bet boss defiant after U.S. arrests

Online-bet boss defiant after U.S. arrests

Canadian billionaire sees no impact Internet-gambling shares see snake eyes amid fears U.S. crackdown might spread

AP; The Gazette; CP contributed to this report
Published: Wednesday, July 19, 2006

Canadian billionaire Calvin Ayre, founder and chief executive 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 yesterday 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 yesterday.

"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 said.

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 firm is based.

In his statement, he defended Bodog.com, 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.

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 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.

Antiguan Finance Minister Errol Cort said his Caribbean country will closely monitor legal action against BetOnSports and the 11 indicted in the U.S. The two-island country Antigua and Barbuda has licensed 30 online gambling firms.

Shares fall: Shares in Canadian online gambling companies fell yesterday amid fears the U.S. crackdown might spread.

Shares in software firm CryptoLogic Inc. tumbled $3.66, or 14.7 per cent, to $21.22 on the Toronto Stock Exchange, while Fun Technologies Inc., an online gambling firm, was down 20 cents or 3.7 per cent at $5.20.

Shares in Las Vegas From Home.com, or LVFH, the parent company of Action Poker Gaming Inc., were off 3 cents, or 15 per cent, at 17 cents on the TSX Venture Exchange. Vancouver-based Chartwell Technology Inc. was down 2 cents at $2.35.

In Canada, companies must acquire provincial licences for betting businesses. It is illegal to bet otherwise, although it is legal to provide services to a company operating in a jurisdiction where wagering is allowed.

About 30 online casinos use computer servers at Mohawk Internet Technologies, on the Mohawk reserve of Kahnawake, on the South Shore.

Kahnawake, with its North American technologies and market proximity, is considered one of the world's top five online gaming jurisdictions, said David Shone of Desjardins Securities.