Is there trouble in(off-shore) paradise?

Nov 30, 2004 5:05 AM

 

One of the off-shore betting industry’s biggest and most respected operators, BetonSports, reported last week that the U.S. government’s crackdown on Internet gambling has cost the company millions of dollars.

Based in England and Costa Rica, BetonSports’ share price plummeted more than 50 percent as a result of the losses.

BetonSports relies heavily on U.S. customers. But in recent months, the U.S. government has sought to deter online sports betting by banning the use of credit cards and some forms of bank transfers.

Moreover, the U.S. Justice Department this year launched a "cease and desist" campaign that targeted American media — radio and TV stations, newspapers and magazines — not to air or print off-shore betting ads with the threat of prosecution for aiding illegal gambling.

BetonSports President David Carruthers said the campaign has worked, and cited the cancellation of $10 million worth of radio advertising that was scheduled to run during the crucial football season.

To compound their problems, BetonSports suffered about $3 million in losses two weeks ago, when 12 out of 14 NFL games went against the sportsbook.

"It was the worst day since Frankie Dettori rode all seven winners at Ascot in 1996," Carruthers said.

Closer to home, some publishers of betting information have felt the heat of the government’s crackdown. According to insiders, Jim Feist did not publish his usual number of basketball yearbooks this season because of threats from government officials. In the past, the books had carried advertising from off-shore betting firms.

cials. In the past, the books had carried advertising from off-shore betting firms.