LONDON – Beleaguered online gaming company BetOnSports on Tuesday terminated the contract of CEO David Carruthers, who was arrested last week in the U.S. on charges of racketeering and corruption.
U.S. authorities have accused Carruthers, along with BetOnSports and its founder, Gary Kaplan, of illegally accepting sports bets from U.S. customers.
“This action was taken as a consequence of (Carruthers’) continued detention by U.S. authorities,” the company said in a statement.
“Clearly, while he remains in the custody of the U.S. government, he is unable to perform his duties. Further the company has been unable to speak directly with Mr. Carruthers,” it added.
Shares in BetOnSports were suspended shortly after Carruthers’ arrest, having fallen around 23 percent when the news broke.
The company also suspended all its Web sites targeting U.S. customers in response to an injunction from the Department of Justice.
Separately, BetOnSports issued a statement rebuffing press reports about alleged improper activity at the group’s Costa Rican base during VIP parties and other events.
The U.K.’s Mail on Sunday newspaper reported the company hosted a series of “sleazy sex parties” for its most valued customers.
While BetOnSports did not specifically deny the reports, it said all the allegations relate to the time before the various businesses were acquired and floated on the London Stock Exchange in July 2004.
It added that, since the listing, BetOnSports believes it has operated in accordance with the standards expected of a listed company.
The termination of Carruthers’ contract further distances BetOnSports from questions over its past, as he was the only member of the board of directors to be appointed prior to the 2004 float on the LSE’s Alternative Investment Market.
“The board wish to make absolutely clear that none of the founders of the original business has any continuing role within the company,” BetOnSports said, before going on to add that its founder, Kaplan, has a non-management-related consulting agreement.
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