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Betonsports pleads guilty to violating US racketeering laws 25/05/2007
Andrew Clark in New York

The British online gambling company Betonsports has pleaded guilty to federal racketeering under a deal to settle a criminal prosecution for flouting America's prohibition on internet casinos.

In an agreement announced by the US department of justice last night, Betonsports admitted a string of felonies including repeated mail and wire fraud, money laundering and illegal gaming.

The company faces a fine of about £250,000 and in a potentially contentious clause of the agreement, it has promised to provide witnesses and information to aid the US government's prosecution of its former chief executive, David Carruthers.

Betonsports' admission will be claimed as a victory by American opponents of online gambling. Leading Republicans, including George Bush, see the activity as immoral and an untaxed outflow of money from America.

Catherine Hanaway, the federal prosecutor who brought the case against Betonsports in Missouri, said the plea should "put an end to the Betonsports illegal gambling empire".

At its peak, Betonsports took bets from more than 100,000 regular players, raising revenue of more than £800m annually. But the firm's fortunes went into a tailspin when its chief executive was arrested while changing planes in Dallas travelling from Britain to an offshore call centre in Costa Rica. Betonsports is now in liquidation which, its lawyer says, means that it is uncertain whether the company can aid in the prosecution of Mr Carruthers, who has been under house arrest in St Louis, Missouri, since July.

Betonsports' US lawyer Jeffrey Demerath told the Guardian: "The agreement says we will provide information and witnesses if asked but in my client's state of liquidation, I don't know how helpful it can be."

Several other British companies have been caught up in the American betting crackdown. Sportingbet's then chairman, Peter Dicks, was arrested in New York in September but released without charge.

Betonsports' settlement will allow its directors, including the Conservative spokesman on Northern Ireland Lord Glentoran, to travel to America without fear of arrest. In January, the founders of the online payment firm Neteller were charged with money laundering.

The World Trade Organisation recently ruled that America's ban on online gambling amounted to illegal discrimination against foreign companies. Betonsports will be formally sentenced in October.