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BetonsSports.com Founder Gets More than Four Years in Jail

Concluding a more than four year investigation, BetonSports.com founder Gary Kaplan pleaded guilty yesterday to several felony counts and was sentenced to more than four years in jail.  Kaplan, jailed since his arrest more than two years ago, had been charged by the US Attorney in St. Louis with various charges relating to the conduct of the Caribbean based sports betting operation.

Kaplan pleaded guilty to racketeering conspiracy, violating the Wire Wager Act and conspiring to violate in a plea agreement.  He was sentenced to four years and three months in jail and forfeited $43.6 million in illegally obtained revenue as a part of his plea agreement.  He also agreed not to block another $7 million being forfeited by an associate in another plea deal.  Kaplan got the maximum sentence available to the judge in part due to his prior felony convictions for bookmaking and forgery and a misdemeanor which showed his willingness to ignore and break any law he didn't agree with, knowing the activity was illegal.  The judge also ordered Kaplan to undergo counseling for substance abuse and mental health and to earn a high school diploma.  Finally, in a part of the order that must particularly sting, Kaplan may not launch or run a business without permission from the parole office.

Now before anyone gets to feeling too sorry for Kaplan, we need to remember that he took BetonSports.com public in London in 2004, netting at least $100 million for himself in the process.  The bulk of that money still sits in his bank accounts in Swiss banks, awaiting his use when he gets out of prison, which should be in a bit over a year or so, having served more than two years awaiting trial.

However, this entire episode is intended not merely to punish Kaplan but to strike fear into the hearts of operators of offshore casinos and bookmakers around the world that accept bets from Americans.  The clear message the Justice Department and FBI would like you to get is do not step foot in America or you will be arrested, charged under the statutes that Kaplan was charged under and you'll suffer the same fate.  Whether that will be the case under the Obama/Holder administration remains to be seen.  This particular case was initiated under Bush and we don't know yet what the Obama administration policy will be.  We do know that Rep. Barney Frank, the chairman of the House Financial Services Committee, intends to introduce and push hard for passage of legislation which would legalize online wagering.  How that will fare and exactly what will be included is also not yet entirely clear.

Full post as published by Sports Biz on November 03, 2009 (boomark / email).