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BetOnSports faces U.S. charges

Chief executive of Net gaming site, other company officials indicted on racketeering, conspiracy, fraud charges.

Shares in online gaming company BetOnSports were suspended on Tuesday after its chief executive was detained in the United States and the FBI ordered four telephone companies to cut off its operations.

BetOnSports said it had been unable to contact Chief Executive David Carruthers, who is being held in Fort Worth, Texas, but had seen a U.S. indictment "alleging various criminal acts against multiple defendants."

The detention of Carruthers is a blow to the $12 billion-a-year Internet gambling industry. He had spearheaded a campaign against a Republican-written bill to crack down on online gambling.

BetOnSports said it was urgently trying to clarify the situation and assess the impact of a temporary restraining order on its business in the United States, its biggest market.

Shares in companies across the sector fell by as much as 19 percent, while some British gaming executives said they were reviewing whether to travel to the United States.

"This comes a week after the extradition of the NatWest Three, and a lot of companies will be looking at their travel plans," said leisure analyst Wayne Brown at Altium Securities, referring to three former British bankers extradited to the United States last week.

The three pleaded not guilty in federal court to fraud charges linked to a deal with defunct energy giant Enron.

The U.S. Department of Justice said on Monday that BetOnSports was among 11 individuals and four corporations facing various charges of racketeering, conspiracy and fraud.

The founder of BetOnSports, Gary Kaplan, 47, was also charged with 20 felony violations, and a warrant has been issued for his arrest, the Department of Justice added.

"BetOnSports.com and other gambling Web sites operated by Gary Kaplan and his co-defendants offered gamblers in the United States illegal wagering on professional and college football and basketball," said a copy of the indictment seen by Reuters.

The FBI has instructed four telephone companies to stop providing services to BetOnSports, the company said, citing the U.S. Department of Justice.

The United States has also filed a civil case ordering BetOnSports to stop taking sports bets there and to return money held by U.S. customers in their gaming accounts. A hearing in the case could be held within 10 days.

Shares in the company fell 15 percent on Monday after U.S. authorities detained Carruthers while he was changing planes in Dallas on Sunday on his way home from Britain to Costa Rica.