Costa Rica: The Internet's Las Vegas
Online Gambling Companies Set Up In Central American Nation, Out Of U.S. Reach
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Play CBS Video Video The Biggest Game Because Internet gambling companies can't operate in the United States, they're based in countries with looser restrictions. Anthony Mason reports from Costa Rica, where one gambling titan is located.
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Online betting companies take much of their action in Costa Rica, out of the reach of U.S. authorities. (CBS)
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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 $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 $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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