11-08-2006 BetonSports to close its operations in Costa Rica and Antigua, 800 staff lose their jobs

The online bookmaker announced that in the light of the Temporary Restraining Order issued by a US Federal Court it no longer considers the US facing operations based in Costa Rica and Antigua to be viable.

The Board of Directors of BetonSports announced they intend to pay any liabilities to staff and creditors as well as repay balances due to US customers in an orderly manner. However, the repayments will take time and their successful completion will depend upon the company’s ability to persuade banks and cash processors to release its funds.

"It also will depend on the company’s ability to realise further and sufficient funds from its assets and operations outside Costa Rica and Antigua and to earn sufficient profits from operations which are not US facing," BetonSports said in a statement.

According to Greg Feehely, analyst at Altium Securities, the US operations contributed over 90% of BetonSports' profit and the online bookmaker will likely have to sell its Asian operations in order to repay customers.

"Given BetOnSports' current situation it would probably be a fire sale and they wouldn't get the full value," commented Tejinder Randhawa, analyst at Evolution Securities.

Feehely added that BetonSports could have attempted to fight the restraining order and indictment in the US, but it may have decided not to, fearing the US Department of Justice would apply for the extradition of its UK-based directors.

"A company that genuinely believed itself to be untouchable has been brought to its knees by the US Department of Justice in a matter of weeks. David Carruthers is betting on jail and Gary Kaplan remains a fugitive from justice. There is no doubt that this case will mark a significant turning point in the history of offshore bookmaking, with those that run the sportsbooks looking over their shoulders just a little bit more than usual," commented Bettingmarket.com.