David Carruthers, the online gaming executive arrested in Texas last week on racketeering charges, has lost his job as the head of BetOnSports and been removed as a director of the company.

In a statement to the stock market today, the AIM-listed company said it had terminated the contract of its former chief executive "as a consequence of Mr Carruthers' continued detention by US authorities".

Mr Carruthers, along with the company's founder Gary Kaplan and others have been charged with conspiracy, fraud, and racketeering through taking sports bets from residents in the United States.

"Clearly, while he remains in the custody of the US government he is unable to perform his duties," the company said. "Further, the company has been unable to speak directly with Mr Carruthers."

Mr Carruthers, who last Friday appeared in a Texas court in shackles and an orange jumpsuit, denies all of the allegations made against him.

A spokeswomen said Mr Carruthers would be entitled to compensation under the terms of his contract. It is not yet clear what the precise terms of are, but according to last year's annual report he was paid a total of $465,000, comprising $413,000 in salary and fees of $52,000.

The company report states that, as at the beginning of February, Mr Carruthers also held the option to buy 3 million shares in BetOnSports at 140p a share. The shares were suspended at the company's own request last week at 122.5p.

BetOnSports also moved to distance itself from Mr Kaplan, making clear that since the company's listing the founder's role has been "non-management related, which was an absoluted requirement of the board for the float and thereafter".

"Some media reports have focused on alleged improper activity occurring at the group's Costa Rican business premises during VIP parties and other events. All these allegations relate to the time prior to the acquisition of the business by the company and its July 2004 float," BetOnSports said.

Many reports have suggested that Mr Kaplan is the real target of the American authorities.

No direct replacement for Mr Carruthers has so far been made. The company spokeswoman said that the management board would share his responsibilities.

Clive Parritt, the non-executive chairman, has been playing a central role, aided by fellow independent directors Lord Glentoran and Chris Callaway.

The executives who will now oversee Mr Carruthers' previous duties are Clive Archer, the operations director, Richard Creed, finance director, and technology director Scott Walker, who only joined the company in May.

For further details on BetOnSports shares click here

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