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Online Gambling Poses Security Threat To US, Says Key Official

by Leroy Baker, for LawAndTax-News.com, New York

14 August 2006


The United States is cracking down on internet gambling because the industry can easily be exploited by criminal groups to fund terrorist activities in the US, according to Missouri's US attorney Catherine Hanaway, who launched the criminal and civil proceedings currently threatening the existence of BetonSports.

Hanaway told UK daily, The Guardian, in an interview published earlier this month that, by taking bets from US-based punters, BetonSports, registered in Costa Rica, siphoned an unacceptable amount of money out of the country.

"This is a very large amount of money flowing on an unregulated basis out of the US. Any time that much money's flowing outside the US, there are concerns about its destination. Under US laws, legitimate large flows of money are required to be subject to suspicious activity reports," she told the paper.

"We need to check it is not being used for money laundering, drug financing or terrorism. Because it's flowing out of the country in an unregulated way, we simply don't know the ultimate destination," she added.

Last month, a federal grand jury in the Eastern District of Missouri returned a 22-count indictment charging 11 individuals and four corporations, including BetonSports, with various charges of racketeering, conspiracy and fraud.

“Illegal commercial gambling across state and international borders is a crime,” Hanaway stated at the time.

“Misuse of the internet to violate the law can ultimately only serve to harm legitimate businesses," she added.

The firm is also accused of failing to pay federal wagering excise taxes on more than $3.3 billion in wagers taken from the United States.

The fate of BetonSports in at present uncertain with recent news reports suggesting that the company is scaling down its operations in Costa Rica and is preparing to sell off some of its assets. On the other hand, the fact that the company did not send lawyers to court hearings suggests that the firm is not taking the proceedings seriously.


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