Gary Kaplan will be sentenced in October, faces a minimum of 41 months in prison

BetonSports founder Gary Kaplan, who headed one of the world’s largest Internet betting businesses, pleaded guilty in U.S. District Court in St. Louis to charges of racketeering conspiracy and violating the Wire Act.

The elusive 50-year-old gambling kingpin, who has been held without bail since his arrest at a hotel in the Dominican Republic in March 2007, faces no less than 41 months in prison. He is scheduled to be sentenced in October.

As part of the plea agreement Kaplan has forfeited more than $43 million to the U.S. government. The confiscated funds were wired to a District Court bank account from a Swiss bank account prior to the plea.

“Today’s guilty plea should have a lasting effect because Kaplan was not only the founder of BetonSports, he was also one of the pioneers of illegal online gambling,” said John V. Gillies, special agent in charge of the FBI in St. Louis.

The extent of the lucrative network of offshore betting operations and related entities tied to Kaplan was revealed in court. They date back to the mid- to late 1990s and included businesses in Aruba, Antigua and Costa Rica, all designed principally to offer sports betting to U.S. residents through the Internet and a variety of toll-free telephone services. Bettors would deposit funds on account from their computers and the money would be transferred out of the United States to entities Kaplan controlled.

The largest of these, BetonSports, advertised heavily in the United States, claiming its business was legal, and even promoting itself at high-profile sporting events such as the Super Bowl. At its peak BetonSports had nearly 1 million registered customers and handled more than $1 billion in wagers a year. The company was so successful, in 2004 it went public on London’s Alternative Investment Market, netting more than $100 million in an initial public offering.

It was around that time that David Carruthers, a British national and an executive with Ladbrokes, was recruited as chief executive. It was his arrest in Dallas in 2006 that spread panic throughout the online gambling industry and coincided with a wave of high-profile federal prosecutions of offshore Web betting operations and payment processors.

Carruthers pled guilty in April to federal racketeering charges and faces up to 33 months in prison. He is scheduled to be sentenced in October.

Two suspects in the BetonSports investigation are still being sought.

“We will follow all leads, no matter how far, to bring to justice those involved in this scheme,” Gillies said.