The exact reason for his arrest is yet to be known, but rumours are rife. Not least is the speculation surrounding the recent proposed bill to outlaw Internet Gambling, which has been passed by the US House of Representatives, and is about to go to the Senate. However most industry insiders, and David Carruthers himself, do not believe the bill will ever be passed by the Senate.

Other theories are assuming it’s a tax-evasion arrest. These are fueled by the fact that the IRS (Internal Revenue Service) was present at the arrest and is known to have many outstanding tax-evasion issues with companies and individuals connected to BetOnSports, some of which go back many years. BetOnSports was created in 1995 and floated in 2004, but Scottish-born David Carruthers became CEO in 2000 after having worked at Ladbrokes for 24 years.

For now he has to wear an inmates’ orange jump suit and spend 23 hours a day in a shared cell in the Seagoville Federal Correctional Centre near Dallas. A date will be set for his bail hearing in court, which should be within 48hours. Once the charges are known the Internet Gambling industry can then relax, or prepare for a period of heightened tension with its US counterparts.

18th July, 2006.

Update 1 - 19th July: The BetOnSports website has been closed down by the company with the following message "In light of court papers filed in the United States, the company has temporarily suspended this facility pending its ability to assess its full position. During this period no financial or wagering transactions can be executed". A Reuters article implies that the company had been trying to do a deal with US prosecutors over charges against the company and its chief executive.

Update 2 - 26th July: The fallout of Carruthers' arrest continues. Coral stopped Americans from wagering on its suit of sites from the weekend. A spokesperson for GalaCoral said, "A very small number of US citizens have played bingo and poker on the website and Gala has never taken bets on US sporting events and has never advertised in the US."
At the same time, Bodog, a direct competitor of BetOnSports announced that they were going to cancel their annual conference (actually a party in disguise) in Las Vegas, amid "overwhelming concerns from attendees over the US legal situation." Since arrests don't usually get in the way of eGaming people enjoying themselves, expect to see the party resurrect itself elsewhere in the world later in the year.
And the £1.6 billion flotation of Pokerstars has been put on hold, again. The online poker company is believed to be working with HSBC and Dresdner Kleinwort Wasserstein on its strategic options.