November 3, 2009 / 6:30 PM / 10 years ago

BetOnSports founder gets 51 months in U.S. prison

WASHINGTON (Reuters) - The founder of the defunct British online offshore gambling firm BetOnSports, Gary Kaplan, was sentenced to the maximum 51 months in prison for conspiring to violate U.S. racketeering and other laws, the Justice Department said on Tuesday.

Kaplan, 50, pleaded guilty to the charges in August and as part of the agreement forfeited almost $44 million which the U.S. government described as proceeds from his criminal activity. He has been incarcerated since March 2007 and the judge in the case in St. Louis could have given him a sentence from 41 to 51 months in prison.

“Kaplan’s business model itself was built on a wager that the U.S. could not and would not enforce its anti-sports book laws to reach Kaplan,” Michael Reap, the acting U.S. attorney in St. Louis, said in a statement. “Today, Kaplan lost that wager.”

BetOnSports ceased operations in 2006, and customers lost between $7 million and $20 million, the Justice Department has said.

Kaplan admitted in court that beginning in the mid- to late 1990s, he set up business entities offshore in Aruba, Antigua and eventually Costa Rica to provide betting services to U.S. residents through Internet Web sites and toll-free telephone numbers.

Some of his Web servers were located in Miami and U.S. customers placed wagers over U.S. telephone lines.

Kaplan in mid-2004 made a successful public offering of the stock of BetOnSports on the London Stock Exchange’s AIM market that netted him over $100 million, the Justice Department said.

Reporting by Jeremy Pelofsky and James Vicini, editing by Alan Elsner

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