BetOnSports fined 28M.

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ST. LOUIS — BetOnSports, the international gambling powerhouse brought down by federal prosecutors here, was sentenced Tuesday as a company to probation and a $28.2 million fine.


It is currently in liquidation, with millions of dollars more liabilities than assets, and the fine is unlikely to be paid, said lawyers on both sides.

U.S. gamblers alone are still owed $7 million to $8 million, according to the company.

Assistant U.S. Attorney Steve Holtshouser said the real amount may be much larger. He estimated that perhaps only half went through the steps to verify the money owed to them. Others may have been either concerned about the legality of the bets or skeptical of e-mails and ads requesting gamblers to provide proof to the company.

The majority of customers were in the U.S.

BetOnSports lawyer Jeffrey Demerath said there are only several million in assets. The liquidators are in the process of trying to collect what will likely amount to only a few million dollars more, he said.

Given all the bills BetOnSports owes, gamblers still owed money are considered unlikely to see more than pennies on the dollar.

BetOnSports folded after the company, founder Gary Kaplan, and other employees and executives were indicted in St. Louis in 2006 on federal charges that accused them of running an illegal gambling operation that handled more than $1 billion in wagers a year through hundreds of websites and dozens of phone lines.

The company agreed to stop taking U.S. bets in a civil settlement later that year. In May 2007, the company pleaded guilty of racketeering conspiracy.

Former CEO David Carruthers pleaded guilty of racketeering conspiracy in April 2009 but has not yet been sentenced.

Kaplan pleaded guilty in August of conspiracy, racketeering conspiracy and violations of the Wire Wager Act, and agreed to forfeit $43.65 million. He was sentenced in November to 51 months in prison.

Kaplan's brother, Neil Scott Kaplan, and sister, Lori Beth Kaplan-Multz, who had worked for the company, pleaded guilty in June to two felony conspiracy charges and agreed to turn over more than $6 million held in Swiss bank accounts.

They were also sentenced to 10 months of house arrest.

Asked where BetOnsports' money had gone, Holtshouser said that the company was once cash-rich but embarked on a strategy of using that cash to buy other gambling companies.

When the company ran into criminal trouble, creditors and payment processors were reluctant to pay money owed to a defunct company that had been indicted in federal court and had money troubles, lawyers on both sides said.

Said Holtshouser: "They made a bad bet."
 
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