David Carruthers on Tuesday learnt he had been fired by BetonSports as he waited in a US jail cell for a bail hearing to take place.
The online gambling company terminated the contract of its chief executive, who is facing charges of racketeering, conspiracy and fraud in a case that has wiped millions of pounds from the values of other companies in the industry on fears of a broader crackdown against gambling companies.
BetonSports is believed to have made the move to prevent Mr Carruthers from speaking to US authorities as a company representative. It is also firing its only indicted director in an attempt to extricate itself from a controversy that has shut down 85 per cent of its business.
Unless it resumes taking bets from US punters by the start of the American Football season in September, the company is understood to be at risk of collapse.
The decision to fire Mr Carruthers was described by Tony Evans, his lawyer, as “unfortunate”. “I’m sure [it] has been made for business purposes,” he said.
A senior executive from a rival company described BetonSports’ action as “leaving him to the sharks”. “It’s disgraceful what they’ve done. They haven’t even spoken to the guy and they’ve dumped him,” the executive said.
But lawyers in the US said the decision was standard in such cases. “The firing is not a surprise. I am sure the company is making every effort it can to stay in business and to work out a settlement with the US government in the criminal case,” said Sheldon Krantz, a partner at DLA Piper.
However, Gary Kaplan, the founder and largest shareholder in BetonSports, is still employed as a “consultant”, although he has not been actively involved with the company for some time.
Mr Kaplan could not be dismissed until last week – a year from BetonSports flotation in London – according to his contract. The company has not yet taken steps to remove him.
Mr Carruthers was returning to his home in Costa Rica, where BetonSports is based, when he was arrested on July 17.
The former chief executive is expected to transfer from Fort Worth to St Louis sometime this week for a bail hearing.
Meanwhile, 888 Holdings, another UK online gaming company, on Tuesday revealed more of its business was coming from outside the US.
Non-US customers contributed 48 per cent of total group deposits in the first half of the year and 67 per cent of new customers were from outside the country, said 888 in a trading update.
“Even if the company had to exit the US, we believe the remaining business would show healthy profits and cash generation,” said Charles Hall, an analyst at Panmure Gordon.