Excerpt:

SMART gamblers know when to quit and when to hold their nerve and let bets run. The holders and folders who invest in internet gambling firms were given much to ponder with the arrest in America on Sunday July 16th of David Carruthers. The British chief executive of BetonSports was detained while changing planes in Texas en route from London to the online gambling firm’s base in Costa Rica. The next day many shareholders showed they weren’t prepared to risk their investments. Shares in BetonSports plunged. So did the value of other online firms that rely on American punters.

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But the relevant laws largely predate the internet era. Legal opinion is divided over the extent to which the 1961 Wire Act, a statute designed to stop gambling over the phone, can be applied to betting over the internet. In this case, that may not matter. BetonSports—unlike most of its rivals—takes wagers both online and over the phone. Moreover, it accepts bets on American sports events as well as running casino-type games. Though BetonSports faces charges concerning both types of gambling, other online firms that do not run a sports book remain confident that they are safe from prosecution.