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Costa Rica: The Internet's Las
Vegas
(CBS)- It's more than
2,000 miles away from Las Vegas
or Atlantic City, but if you
place a bet on the Internet,
odds are it will end up being
processed in Costa Rica.
There, on the night of the NCAA
basketball championship game,
the bets were pouring in to
BETonSPORTS.com.
The Costa Rican-based company,
by our estimates, took in
100,000 wagers for Monday
night's game alone.
This small Central American
country has become a new capital
for Internet gambling.
More than 200 companies have set
up shop here. The biggest
attraction: They don't have to
pay taxes on profits they earn
outside the country, CBS News
correspondent Anthony Mason
reports.
They're also out of reach of
U.S. authorities, who say
companies like BETonSPORTS.com
are in violation of the U.S.
Wire Act by taking bets online
illegally.
Not everyone agrees.
"I say I'm not," says David
Carruthers, BETonSPORTS.com's
CEO. "If I was doing this in the
United States, it would be
illegal. But I'm not. I'm doing
it here in Costa Rica."
How many calls does the company
get on an NFL Sunday?
"About 60,000," Carruthers says.
Internet gambling has become a
us$12 billion global business.
BETonSPORTS.com is even traded
on the London Stock Exchange.
Among its biggest investors are
blue-chip U.S. firms Fidelity,
Morgan Stanley and Goldman
Sachs. What does that say?
"It says we're a good
investment," Carruthers says.
But the U.S. government has gone
after the support system for
Internet gambling. For example,
it has forced eBay's PayPal unit
to pay us$10 million for
processing payments to offshore
companies.
"But I will tell you, it's very,
very difficult to enforce United
(States) law in jurisdictions
that don't respect United States
statutes," said Rep. Jim Leach,
R-Iowa, who's leading a push for
tougher laws.
"If you ban online gaming, all
you're going to do is drive this
activity into the hands of
undesirables," Carruthers said.
"And that's very, very
dangerous."
Carruthers says he wants
legalization, regulation and
even to pay taxes in the United
States.
"I'd be there tomorrow," he told
Mason. "I'd go back on the plane
with you."
For now, in the poker game for
Internet gambling's exploding
market, Costa Rica is holding a
winning hand.
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