U.K. Gambling CEO Arrested at U.S. Airport

Details are still sketchy, but it looks as if David Carruthers, a U.K. citizen and CEO of the U.K.-incorporated, U.K.-traded public company BetOnSports.com, has been detained at a Fort Worth airport while switching flights between the U.K. and Costa Rica. He will now apparently be charged in the U.S. for running a company that's legal in just about every Western country except America.  Reuters reports:

The U.S. Department of Justice said on Monday that BetOnSports was among 11 individuals and four corporations facing various charges of racketeering, conspiracy and fraud.

The founder of BetOnSports, Gary Kaplan, 47, was also charged with 20 felony violations, and a warrant has been issued for his arrest, the Department of Justice added.

"BetOnSports.com and other gambling Web sites operated by Gary Kaplan and his co-defendants offered gamblers in the United States illegal wagering on professional and college football and basketball," said a copy of the indictment seen by Reuters.

It's probably worth noting that Carruthers is an outspoken advocate for legalizing online gambling in the U.S. He recently debated Rep. Jim Leach on the issue in the Wall Street Journal. If Carruthers is being held solely because U.S. customers illegally do business with his legal, U.K.-based company, that's disturbing enough.

But things could get even more interesting.

Carruthers was careless enough to have step foot on U.S. soil, even if only to switch planes. But as the Voluntary Trade Council's Skip Oliva explains, the U.S. and the U.K. have also entered into some curious extradition treaties since September 11, and the U.S. has exploited those treaties to effectively kidnap British citizens who broke no British laws, and extradite them to the U.S. for trial on charges of violating U.S. law.  It's worth noting that the cases Oliva writes about are iffy white collar crimes that have nothing to do with terrorism.

And let's not forget the Mark Emery case, in which the DEA's zealous persecution of medical marijuana users led them to extradite a medical marijuana activist from Canada for charges of marijuana distribution in the U.S..  It was inarguably a purely political arrest. The DEA bullied Canadian and British Columbia law enforcement officials -- where marijuana laws are lax, if enforced at all -- into doing its bidding.

The jihad against online gambling spilling out from Congress these last few months portends a showdown between the U.S. and the U.K. What's interesting is that this time, the U.K. is unlikely to back down.  Britain has embraced Internet gambling and gets a substantial amount of tax revenue from the $12 billion U.S. consumers spend gambling online each year, much of it with U.K.-incorporated gaming sites.  You have to think U.K. officials would have an interest in maintaining those revenues, not to mention in protecting their citizens, and in the integrity of the tech sector of their markets, which took a spill after Carruthers' arrest.

Might the U.S. try to enforce its gambling ban by extraditing gambling executives in other countries? Would those countries comply? What are the implications of either scenario?

If Congress succeeds in pushing through its farcical, ill-considered ban on online gambling, these are just a few of the issues that'll inevitably pop up down the road. I've written before about some possible free trade entanglements the bill presents. But here's another: One way U.S. consumers may get around the bill's deputizing U.S. banks to enforce the gambling ban would be to simply open accounts in banks based overseas. Will Congress then attempt to ban wire transfers between U.S. banks and overseas banks that allow transactions with gaming sites? I wouldn't put it past them.

The heartening side of all of this is that it shows how technology, trade, and commerce can work together to circumvent heavy-handed government meddling. The distressing part is just how far some in the U.S. government will go to impose their values on American citizens.

I guess nobody ever said moral crusading was easy.