Internet Gambling Executive's Arrest Raises Questions

DALLAS  -- The surprise airport arrest of a prominent UK internet gambling executive this week is a counter-productive application of US law that ignores complex international trade issues, says
BETonSPORTS casino has been temporarily shut down.  Larry Gaydos, partner in the White Collar Defense/Antitrust Practice Group at Haynes and Boone, LLP.

"Selectively targeting foreign businessmen who are respected in their own country to sensationalize the issue is unfair to the individuals and our friends in the international community," says Mr. Gaydos, who has extensive experience in white collar criminal defense, foreign trade, and general criminal matters. "Long-term, it may also have adverse consequences on US business. If the tables were reversed, I am sure the US would be outraged."

Along with the recent extradition of three UK bankers to face Enron- related charges in Houston, the arrest of BetOnSports.com executive David Carruthers at Dallas-Fort Worth International Airport Sunday night has prompted many in the UK business and legal communities to cry foul. As the New York Times pointed out this week, "Now, many fear that the same controversial extradition treaty could be used to force British online gambling executives to stand trial in the United States." Understandably, gaming stocks on the London Stock Exchange have been severely impacted.

But, Mr. Gaydos says, the two cases are actually quite different in legal foundation. The British banker extraditions involved wire fraud, but encompassed conduct that would be a crime in most countries. The supporting FBI affidavit used in the extradition proceedings properly sets out a "probable cause" case, he says.

The Carruthers arrest, however, is problematic because the activity involved -- online gambling -- is legal in the UK.

"The issues involved are complex international issues involving trade and broader issues about the international policing of the Internet," Mr. Gaydos says. "The many problems associated with both these international issues require international solutions. The US attempt to do an end-run through a publicized arrest like this is legitimately perceived as arrogant and probably counter-productive to the mutual international goal of solving a growing problem."