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Costa Rica's online gambling companies seek to remain in business after BetOnSports closes

By MARIANELA JIMENE
August 12, 2006

Costa Rica's online gambling companies said Friday they will lobby the government to remain open despite the closure of BetOnSports PLC because of legal problems in the United States.

BetOnSports, or BoS, the Central American country's largest online gambling company employing nearly 2,000 people, said Friday that it was shutting down.

But there are more than 200 other online gambling firms still in operation and employing a total of 10,000 people in Costa Rica, where the industry is unregulated.

The president of the Costa Rican Electronic Gambling Association, Eduardo Agami, said Friday the industry planned to lobby Costa Rican officials to allow them to remain in business.

"The case of BoS is between them and the U.S. government," Agami said. He said the industry's fate was in the hands of Costa Rican officials.

BetOnSports faces a 22-count indictment on fraud and racketeering charges in the U.S. District Court in St. Louis.

David Carruthers, the firm's former chief executive, remains in jail in the United States after being arrested while changing planes in Texas. Prosecutors are seeking the forfeiture of US$4.5 billion (euro3.5 billion), plus several cars and computers from Carruthers and 10 other people associated with the gambling operation.

The judge contends the bets were placed illegally, violating the 1961 U.S. Wire Act. The order, which expires Monday but could be extended, also prevents BetOnSports from taking U.S.-based bets.

Agami said his association's members planned to analyze the situation and work on a plan to "calm the firms' employees, the clients and the government."

Costa Rican Justice Minister Laura Chinchilla said recently the industry needs "serious regulation."

Agami agreed.

"We believe that the industry could be productive for Costa Rica and should be allowed," he said. "In the United Kingdom, for instance, they regulate it with operating licenses. Here they need to establish the limits."

Meanwhile, the BetOnSports' offices at the San Pedro Mall in the Costa Rican capital of San Jose were a whirlwind of activity Friday with former employees and government officials coming and going.

A U.S. federal restraining order issued last month requires BetOnSports to return any money that American customers have tied up with the site. Almost all the wagers placed on BetOnSports come from the U.S.

For the 53 weeks preceding February 2005, the company's sports betting operation had more than 71,000 active customers who placed 9.9 million bets. The average bet was US$109 (euro85). Prosecutors said 97 percent of the sports bets are made on American football, basketball and baseball.

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