Jaromir Jagr, the Washington Capitals star and the highest-paid player in the NHL, said yesterday that he made a "mistake" by betting on sports events via an Internet site and accruing $500,000 in losses.

William Ceasar, the managing director of Caribsports.com, said Jagr began accruing the debt in 1997 and agreed to start making payments in 2000 after Ceasar agreed to reduce the debt.

But Ceasar said Jagr, who owes the Internal Revenue Service $3.3 million in back taxes for the year 2001, stopped making payments.

After not hearing from Jagr for "a couple of years," Ceasar said someone at the betting site leaked the story last April to Buzzdaly.com, an online magazine that covers the gambling industry.

"We didn't like being ignored," Ceasar said. "Obviously, we did this to help get back our money."

Sports Illustrated has reported that it obtained a document that shows Jagr proposed making nine monthly payments of $37,500 and one lump-sum payment of $112,500, a total of $450,000, in June 2000.

Ceasar said Jagr, who is from the Czech Republic, satisfied the debt eight months ago. Jagr argued the matter was resolved before that.

"This was all taken care of in 1999," Jagr said yesterday after practice at MCI Center. "This is old news. . . . It wasn't smart. I made a mistake."

General Manager George McPhee declined to comment. Owner Ted Leonsis said he did not want to comment until he had spoken to Jagr about both situations.

The NHL apparently will take no action in the matter.

"We currently have no prohibition on recreational gambling by players, provided no money is bet on NHL games," said Bill Daly, the NHL's executive vice president and chief legal officer.

Ceasar said that Caribsports's employees configured Jagr's betting account so that it was unable to place bets on NHL games.

Jagr is said to enjoy gambling and during the late 1990s was a frequent visitor to the Vegas MGM Grand and Bally's casinos. According to published reports, Jagr was extended a $500,000 line of credit and private baccarat table by Caesars' casino in Atlantic City.

The IRS says Jagr owes $3,270,209 in income tax for the year 2001 and last week filed a lien against the seven-time all-star in Pennsylvania, where he owns a 12,000-square-foot home.

Last August, the IRS filed a claim for $350,000 in unpaid taxes for the year 1999. Jagr, who will earn $11.48 million this season, paid the debt and the lien was removed.

A tax lien allows the IRS to seize assets, such as homes, wages and savings accounts, and is among the last steps the government takes to collect from taxpayers, according to tax experts.

Jagr's teammates said that his financial situation hasn't affected the team.

"That's off ice, personal stuff," said goalie Olaf Kolzig. "Maybe if I had to write a check for 500,000 bucks it would affect me. But it's not a distraction to this team."

A wrist injury has slowed Jagr on the ice but the five-time scoring champion has scored 36 goals for the Capitals in 69 games.

Jagr, 31, is not the only Washington sports star who enjoys gambling. Washington Wizard Michael Jordan drew the wrath of NBA Commissioner David Stern a decade ago when a golfing buddy of Jordan's claimed the then-Chicago Bull owed him $1.25 million in golfing wagers.

A story in The Washington Post last June reported that Jordan participated in an all-night blackjack session at a Connecticut casino during which at one point he was down $500,000 before rallying to go up about $600,000.

"This was all taken care of in 1999," Capitals' Jaromir Jagr said of his gambling debt. Said goalie Olaf Kolzig: "It's not a distraction to this team."Capitals' Jaromir Jagr, right, is said to enjoy gambling and during the late 1990s was a frequent visitor to Las Vegas MGM Grand and Bally's casinos.