241 Pizza

Agents from the Internal Revenue Service were present at the arrest of Mr Carruthers.

In conjunction with the indictment, the United States has filed a civil complaint in federal court to obtain an order requiring BetonSports to stop taking sports bets from the United States, and to return money held in wagering accounts to account holders in the United States.

US District Judge Catherine Perry yesterday issued the temporary restraining order. A hearing in the civil case has been requested within 10 days.

The FBI is issuing letters to four telephone companies, instructing them to stop providing phone service to the internet sportsbooks and casinos operated by BetonSports.

A spokesman for BetOnSports said today: "At the moment no one knows how to evalutate the impact these events may have on the company so we decided the most sensible thing to do was request that the shares be suspended."

The internet gambling industry was thrown into disarray by the arrests which prompted fears of a crackdown on internet gambling, a legal grey area in the US.

A Bill proposing that internet gambling be outlawed has just been passed by the House of Representatives and will now go before the Senate.

US Attorney Catherine Hanaway of the Eastern District of Missouri, said in a statement:"Illegal commercial gambling across state and international borders is a crime.

"Misuse of the Internet to violate the law can ultimately only serve to harm legitimate businesses. This indictment is but one step in a series of actions designed to punish and seize the profits of individuals who disregard federal and state laws,"she said.

The Justice Department alleges that BetOnSports accepted wagers on an internet site and over a toll-free telephone line.

Mr Carruthers, a former Ladbrokes executive, was arrested while changing flights at Dallas Fort Worth airport on Sunday evening when he was stopped while walking through the transit lounge with his wife.

The detention of Mr Carruthers, a British citizen resident in Costa Rica, comes at a sensitive time in Anglo-American business relations after the extradition of the NatWest Three to the US to face changes that they conspired with executives of the collapsed energy giant Enron.

There has also been disquiet in British business circles following the jailing last August in America of Nigel Potter, the former chief executive of Wembley, the gaming operator, over allegations of a bribery conspiracy.

Nigel Parson, leisure analyst at Williams de Broë, said the move would "throw online gambling stocks into a spin", adding: "David Carruthers is a prominent advocate of online gambling. The fear that this is an escalation of the anti-lobby will trouble markets."

Greg Harris, an analyst at Cannacord, said: "It is too early to say if this is part of a broader strategy on prevention of internet gambling in the US or if it is the Department of Justice flexing their muscles and trying to influence legislation."

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