Gaming FD in defiant mood

David Carruthers, the former chief executive of AIM online betting group
BetonSports, was arrested by US officials when he arrived in the country last
week, and was charged with running an illegal betting operation and

Carruthers’s arrest has prompted fears that other online gaming executives,
including those at FTSE 100 giant PartyGaming, could face arrest entering the
US, or even extradition from the UK for tax evasion.

Weigold and his chief executive Mitch Garber, however, said they did not feel
threatened by the development as PartyGaming’s business was completely different
to that of BetonSports.

Weigold said he was ‘very comfortable’ with PartyGaming’s position in the US,
where it takes 76% of its revenues, as the company was up-to-date on its tax
affairs and had not breached any US laws.

It is believed that BetonSports was facing a large tax liability related to
taxes charged on sports betting. Weigold said this was ‘not relevant’ to
PartyGaming, as the company did not take wagers on US sports events.

‘We take very detailed advice on tax in all of the markets from where we are
getting significant numbers of customers. Of course, the US is one of those, but
we are comfortable with our situation there,’ Weigold said. ‘Bear in mind, we
have no operations in the US, we are an online business. We have customers in
the US, but we do not have a base there.’

Garber, a US lawyer by training, said the arrest of Carruthers appeared to be
‘totally consistent’ with previous Department of Justice actions.

Garber said that unlike BetonSports, PartyGaming was not involved in US
sports betting and did not face the same risks. Carruthers was charged because
of US laws relating to sports betting specifically.

‘PartyGaming is very different to BetonSports and has none of the same
characteristics,’ said Garber.

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