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From his humble beginnings sweeping the floor of a betting shop to achieving IPO success and making headlines worldwide, former BetonSports CEO David Carruthers reflects on his 48-year journey in the gambling industry.

Few individuals in the iGaming industry have truly experienced the full spectrum of its evolution — the ups and downs. David Carruthers is one of them.

Ahead of his speaking engagement at NEXT Valletta, he met up with Sonja Lindenberg.

On 16 July 2006, David Carruthers, then CEO of the now-defunct online gambling giant BetonSports, set off on what should have been a routine journey from London Heathrow to the company’s operational headquarters in San Jose, Costa Rica.

Little did he know that this journey would take an unexpected turn.

As Carruthers checked in for his flight, peculiar events began to unfold. He found himself upgraded from business to first class, and the airport staff refused to check his luggage all the way through to Costa Rica.

“I thought that’s strange, but I didn’t give it much thought and got on the plane,” he says.

However, when Carruthers arrived in Dallas, Texas for a layover, an FBI agent arrested him on charges related to his role as CEO of the company.

This marked the outset of a five-and-a-half-year odyssey, which saw him spend 42 months under house arrest before negotiating a plea bargain that led to a 33-month prison sentence for racketeering conspiracy.

Carruthers admits that on the day of his arrest, he was unaware of the gravity of the allegations against him.

He was apprehended under a sealed warrant, which initially withheld the specific charges against him.

“I felt that my arrest was more of a statement, and that the charges would be restricted to illegal gambling, not racketeering.

“The maximum sentence for illegal gambling in the US with a previous conviction was two years. With no previous conviction, it was slap on the wrist. And there were thousands of examples of that as a benchmark. But apparently, the authorities had other ideas,” he says.

Weeks of uncertainty

While Carruthers awaited formal charges, the news of his arrest made headlines worldwide.

Initially incarcerated in a prison in Fort Worth, Texas, he was later transferred to a holding centre in Oklahoma City before being sent to another prison in St. Louis, Missouri.

“It was nine weeks of uncertainty,” Carruthers recalls. “It was nine weeks before I actually got an opportunity to sit down with proper legal advice and discuss the parameters.”

BetonSports’ shares plummeted on the day of his arrest.

A few weeks later, the company, once one of the biggest players in the online gambling industry, terminated Carruthers’ employment and ceased its US-facing operations.

Cut off from the outside world, Carruthers relied on sporadic media updates within the confines of the correctional facilities.

“I only had limited access to information from the media that happened to be available inside the institutions,” he explains.

“None of these institutions were five-star hotels; none of them were familiar to me. So, there was a bit of a learning curve.”

Carruthers navigated the challenges with a sense of pragmatism and resilience.

“You fall back upon your intuition, instincts and life experience,” he remarks. “I was very lucky in the sense that I’m a sensible individual; I don’t overreact, at least outwardly.”

Moreover, he says “people had a perception of who I was because of the media.”

His fellow inmates thought that he was a billionaire and that he was part of the US mafia, Carruthers suggests.

“Both things weren’t true, but they afforded me a level of respect and safety that I might not have had otherwise.”

42 weeks of house arrest

In August 2006, authorities released Carruthers on a $1m bail bond and placed him under house arrest pending his court appearance.

The following six months, Carruthers spent in an apartment within a hotel, which he had to rent before he was able to move to another flat.

Initially, he wasn’t allowed to leave the apartment at all, but then his outdoor time was gradually increased to one, then two, and finally six hours a day, all while being tracked by an ankle bracelet.

Despite the restrictions, he adapted to his new reality, describing it as “you just live a normal life,” with daily tasks such as grocery shopping, cooking, and laundry part of his routine.

In the initial months, he also faced the daunting task of reviewing 500,000 legal documents related to his case.

“I can assure you that virtually every key figure in the industry at the time — whether a chief executive or a prominent entrepreneur — were mentioned within those pages,” he says.

Carruthers believes he was an easy target. He had heavily campaigned for online gambling regulation in the US and was the head of a publicly listed company.

BetonSports floated on the London AIM stock market in 2004, raising £54.6m.

Pleading guilty

While under house arrest, Carruthers made a vow to himself that he would reclaim lost time by ensuring he lived several years longer than he otherwise might have.

At 51 years of age, he began a running regimen (“I had stopped exercising at 17 years”) and eventually secured permission to participate in the St. Louis Marathon, using the opportunity to raise funds for charity.

“I also believed that I could garner some positive publicity, and there would be no harm if the judge took notice of this,” he admits.

After initially pleading not guilty, Carruthers eventually changed his plea to guilty.

The risk of facing many years in prison was simply too great.

“I wanted to fight because I’d done nothing wrong, but this was not just my fight. I thought if I lose, my family loses, too. So I pleaded guilty for them.”

He received a 33-month prison sentence. After serving 14 months of his sentence, authorities transferred him to the UK to complete the remainder of his term.

Labelled for life

Upon his release from prison in 2011, Carruthers embarked on a new chapter in Asia, distancing himself from the gambling industry.

He established a fashion distribution business in China and later ventured into the culinary world by owning and managing his own restaurant in Taiwan.

Despite these achievements, the shadow of his past conviction persisted, limiting his professional opportunities.

“The reality is that once you are labelled, you have to deal with the label,” he reflects.

Carruthers points out that the legalisation of sports betting and iGaming in the US, which commenced after his release, validates his stance.

However, he emphasises that the enduring injustice lies in the lifelong stigma attached to his conviction.

“This still irks me today,” he says.

“I am not a criminal. I made a commercial misjudgment, but I genuinely believed that regulation would come from the US – I was simply 12 years ahead of its actual occurrence.”

Carruthers describes his experience as traumatic, and to this date, he cannot find the right words for it.

However, he says, he was always a fighter.

Growing up in Scotland, he remembers being physically diminutive as a child.

Moreover, being dyslexic compounded his struggles; in an era where awareness of such conditions was scarce, he faced the misconception of being unintelligent, even from educators.

Carruthers learned not only to defend himself verbally but also to navigate his environment shrewdly, anticipating and circumventing potential threats.

“Maybe I won’t go home in that direction today,” he would ponder, “I’ll go that direction today, because they’ll be waiting for me.”

He says that foundation of resilience helped him to overcome various challenges in life, including the emotional trauma of his arrest.

“Once you manage your anger, you can move forward, and that’s exactly what I did.”

A private man

In Asia, Carruthers said he lived a very private life. “Nobody knew who I was. Nobody knew my history.” He learned Mandarin, and his restaurant was quite a hit. 

“I used to have only six seats available, but at $350 per person. I was fully booked for three months straight, offering a seven-course tasting menu that took guests on a journey inspired by the Orient Express.”

However, one day, an acquaintance representing an Asian company approached Carruthers, seeking his expertise in business development within the iGaming industry.

Initially sceptical, he accepted the offer.

For the past six years, he has actively collaborated with the team on various successful ventures, although he maintains a low profile regarding his involvement and prefers not to disclose the company’s name.

48 years in the industry

Carruthers was 19 when he became a shop manager at Ladbrokes and stayed with the firm for 24 years until he became CEO of BetonSports in 2000.  

“I’m an old school bookmaker, I understand odds. I understand the thrill of gambling, but I don’t understand why customers play some games and not others,” he says when asked about his views on the state of the industry today.

“Product” is the only thing that differentiates the industry today from what it was a few decades ago.

Still, he asserts, “there’s not enough differentiation in the product. But I don’t have a secret formula for success.”

Carruthers – now looking back at 48 years of industry experience – believes that online gambling will eventually be regulated across the globe.

“There will be instances where regulatory actions by independent governments will seem austere and appear stupid.

“But over time, regulations will evolve and bounce back to something reasonable because there needs to be winners on both sides – operators and the government,” he says.

Without proper balance, only the black market will win.

Satisfaction and determination

Carruthers today lives in Malta and says he still gets excited about his job.

“One of the things that I actually get most satisfaction from today is when I have the opportunity to mentor somebody, coach them, teach them, and see their growth,” he says.

He adds, however, that he will never tire of the satisfaction that comes with successfully closing a deal.

Carruthers, much like countless others, stumbled into the industry almost by chance.

“My dad told me to go for an interview at the local betting shop and made it clear that I better get the job or find somewhere else to live as money was tight.”

During the interview, when asked why he wanted the job, Carruthers boldly declared, “Because I want your job in a few years’ time.”

He did get the job and fully embraced it, pouring his energy and dedication into every task.

“I progressed from sweeping the floor at the end of the evening to creating a public company,” he says.

Without unwavering determination, this would not have been possible.

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