Embattled internet gaming company BetOnSports has shut down its American-facing businesses with the loss of 800 jobs as part of a bid to shake itself free of racketeering, conspiracy and fraud allegations surrounding it and its former executives.

Formally cancelling any potential access for American customers is also aimed at ending its exposure to a market where online gaming is a contentious issue and internet sports betting is deemed illegal.

BetOnSports had been the subject of a US court-issued restraining order preventing it from running its American-facing businesses.

The shutdown follows the arrest in Texas last month of David Carruthers, the chief executive, and amid the continuing hunt for the company's founder Gary Kaplan. BetOnSports subsequently sacked Mr Carruthers and says it is no longer associated with Mr Kaplan.

The company and its former directors are facing 22 charges related to alleged illegal gaming activities as a result of taking bets from customers resident in the US.

BetOnSports has yet to establish how much it will cost to exit its US-facing businesses, which are based in Costa Rica and Antigua. It is currently holding talks with its bankers and the companies that process its cash to try to release funds.

Paying off staff and creditors is dependent on the successful completion of these talks, BetOnSports said.

According to the most recent annual report, BetOnSports employed a total of 1,985 staff worldwide.

It is believed that news of the planned closure began to leak out yesterday evening after a large number of company-owned cars were put up for sale.

The move leaves BetOnSports, which is quoted on the London Stock Exchange but has no UK businesses, with operations in Asia, Argentina and Mexico. Some 80 per cent of its revenues came from the United States.

A spokesman for the gaming company declined to name the banks involved, with whom he said there was open dialogue. But he said they were both national and international banks.

Wayne Brown, an analyst at Altium Securities, speculated that BetOnSports may have to sell off its Asian arm to settle all its outstanding liabilities.

"Therefore we fear there may be little to nothing left for shareholders," Mr Brown said.

"This comes ahead of one of the busiest periods of the year and we would expect that the likes of Leisure & Gaming and Sportingbet to be beneficiaries of the closure of a significant competitor although sentiment across the sector short-term is likely to take a further hit," he said.

A spokesman for BetOnSports said the profitable Asian arm was not currently up for sale, although he did concede there was a possibility it may have to go on the block if the cost of exiting the US is high.

Although company directors remain confident there are enough assets to cover BetOnSports' liabilities, there remains a "big question mark" over how much it will cost to close the businesses down.

Shares in BetOnSports were last month suspended at 122.5p, valuing the company at £110.24 million. For more share details click here

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