Internet gaming group BetOnSports.com announced Friday that the company would be closing its U.S. offices and has laid off 800 employees in Costa Rica and Antigua where its U.S. services are based. About 95 percent of the company’s revenue stems from its clientele in the United States.
The company currently 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 last month.
Charges allege the company failed to pay U.S. excise taxes on more than $3.3 billion in wagers taken from U.S. gamblers.
The government seeks forfeiture of $4.5 billion, removal of access to BetOnSport’s websites in the United States, and the return of money held for U.S. account holders.
The publicly-traded company’s shares have been suspended for more than three weeks and a statement on the site reads, “In light of court papers filed in the United States, the company has temporarily suspended this facility pending its ability to asses its full position. During this period, no financial or wagering transactions can be executed. Further information will be posted once the company is in a position to do so.”
Directors of the company said they would try and refund unpaid accounts, but it “will depend upon the company's ability to persuade banks and cash processors to release its funds.”
Various sources are reporting that the company is planning on generating its revenue back through its Asian offices; Asia currently accounts for just five percent of the site’s profits.
The prosecution is part of a crackdown on online gambling, illegal throughout the U.S.
