BetonSports, the UK-listed online gambling company whose chief executive has been indicted in the US on conspiracy racketeering charges, yesterday closed its sports betting operations in the US, complying with a restraining order from US federal officials.

David Carruthers, who was arrested at Dallas Fort Worth airport on Sunday evening en-route from London to Costa Rica, will appear in a Texas court today for a bail hearing.

Meanwhile, shares in the sector reeled for the third day running, as companies in the online gambling industry engaged in a damage limitation exercise, reassuring shareholders and suppliers that the fate that has befallen BetonSports is highly unlikely to happen to them.

Companies, who like BetonSports operate sportsbooks in the US, have been double-checking their systems to ensure they cannot fall foul of US legislation outlawing telephone gambling and advertising for them.

One industry insider said no stone had been unturned to ensure their operations fell outside US jurisdiction.

"The US department of justice has created sufficient noise through [ the arrest of] David Carruthers to say that we've got our binoculars and taking a long hard look," the insider said.

"They are saying: 'Please be careful how you are conducting your business.' So we are checking and rechecking to make sure we don't use phone lines or advertise for our business."

Analysts have started to draw up a range of scenarios for the future of the industry depending on how widespread the US department of justice's assault on online gambling becomes.

Paul Leyland of Arbuthnot said in a note that the impact of the indictment on BetonSports could be limited to a personal issue, focused on Gary Kaplan, the BetonSports founder.