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The Courts

BetOnSports Founder Pleads Guilty To Racketeering 223

Hugh Pickens writes "The founder of Internet- and telephone-based gambling operation BetOnSports has entered guilty pleas to three US charges, including a racketeering charge, and will forfeit $43.7 million to the US government as part of a plea agreement. Beginning in the mid- to late-1990s, Gary Kaplan set up businesses in Antigua and later Costa Rica to provide sports betting services to US residents through web sites and toll-free telephone numbers. Those numbers terminated in Houston or Miami, and were then forwarded to Costa Rica by satellite transmitter or fiber-optic cable. Some of Kaplan's web servers were located in Miami and were remotely controlled from Costa Rica. People became customers by depositing money in a BetOnSports account. By 2004, the BetOnSports organization's principal base of operations in Costa Rica employed about 1,700 people, had nearly one million registered customers and accepted more than 10 million sports bets. Now bankrupt, BetOnSports took in $1.25 billion in 2004, with 98 percent of that revenue coming from bets made through its web site by clients in the United States. 'Gary Kaplan made millions of dollars by making it too easy for people to gamble away their hard-earned money without having to leave their homes,' said FBI agent John Gillies. 'Today's guilty plea should have a lasting effect because Kaplan was not only the founder of BetOnSports, he was also one of the pioneers of illegal online gambling.'"

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