Off Shore Gaming Association

As the football season approaches we had several requests to clarify the legality of betting online with an offshore bookmaker.

The bottom line on the million dollar question of “Is this legal”, is no - according to the Catherine Hanaway, US Attorney in St. Louis, Missouri. She testified this past winter in front of the House sub-committee that the Department of Justice sees all Internet gambling as illegal. However, she has not gone on to prosecute racing sites like BrisNet or YouBet for accepting racing wagers or the NJ lottery for it’s online Slingo game. So clearly, her statement was a bit misguided.

Unfortunately for gamblers, the UIGEA did clarify all of this to some extent and does provide some backing for her statement. In essence, the US government now bears no distinction between the corner bookie or speakeasy card game and the online operator – both are accepting illegal bets. This is why some of the largest gaming companies, and all of the publicly traded ones, exited the US market after the November 2006 passage of the UIGEA. Certainly investors would not sink money into a company that is accepting ‘illegal’ bets.

Still, we have not heard of a single gambler being prosecuted. In fact, an Arizona case in 2006 found a local bookie using a price-per-head service offshore and the local sheriff organized a year-long sting that successfully busted the entire illegal betting ring. They also were able to garner his complete list of clientele. And, the sheriff who headed the operations came out at the time stated that he also expected to net 200 to 300 other people who made bets. None have been indicted to date. In addition, back in February of this year, another ring, this time in Massachusetts, was popped, again using the Internet to process wagers. This time the lead officer was asked if investigators might take legal action against the bettors themselves and said, “Historically, we haven’t.”

So, even though these bets may be construed as illegal, online gamblers should have little fear of prosecution. It’s all about the money……and there is not much to be gotten from the gamblers. But there is from the operators and banks who process these illegal transactions. After all, Neteller coughed up $136 million, the US government seized almost $20 million from FirePay and Catherine Hanaway’s office was able to extort $31.5 million from Miscrosoft, Google and Yahoo for ‘past promotion of illegal gambling’.

Does the $100 online weekend football bettor have to worry about heading to the can or forfeiting their life savings? Probably not, but the question and subsequent cloudy answer is still clearly on the minds of many players nearly 2 years after the passage of the UIGEA. With no indictments against bettors, it is fairly safe to assume that the bettor, though not shielded from prosecution, can wager with little worry.

And, doesn’t this country have enough problems with banks going under, two wars that appear will last for years to come and an economy that dips lower everyday, without going after its own citizens for what they do with their own money in the privacy of their own homes? The answer here is clearly a resounding yes – leave the gamblers alone to their own vices!

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Earlier this week, the head of the Minnesota Gambling Control Board stated that Barack Obama’s website may be running an illegal raffle. The ‘illegal’ raffle seeks a donation of $5 or more between now and midnight on July 31st, and “you could be one of 10 supporters chosen to meet Barack backstage and watch his acceptance speech in person” at the ‘Open Convention’ at Invesco Field in Denver this August.

The Minnesota state Gambling Board website states over and over again that only nonprofit organizations may conduct a raffle. The site does say that a spaghetti dinner, pancake breakfast or car wash could be used to raise money. Perhaps the DNC can ask Obama girl to wash cars for contributions!

Tom Barrett, executive director of the Minnesota board, received a phone call from someone who had seen the website, and after reviewing it, decided to contact the Department of Public Safety, according to local media reports. The call most likely came from a disgruntled Twins bettor who could not get paid because his offshore book claimed the the US laws were making it difficult to make payments to the states.

This also proves what opponents of the UIGEA have been saying all along, that in this country, gambling laws are regulated by the states. Yet this 2006 Federal banking law is what has caused such a great effect on Internet and offshore gambling.

Apparently this could have been avoided had the Obama website either 1) said the contest was void in Minnesota or 2) included a way for people to participate in the drawing without being forced to invest in Obama’s campaign. The brain trust in the Obama camp apparently took the latter as it would encompass evvery state - the site now has a link stating, “If you do not wish to make a donation but would like to participate in this program, you can still be selected to join Barack at the Democratic National Convention in Denver by clicking here.”

Irrelevant of the fact that we are calling our President by his first name, what I wonder is, “What were the Obama organizers thinking?” They must have thought that this would be a great way to drag in $5 donations form the same players who gamble on the Lottery, but I guess no one thought that ‘raffle’ this may actually be construed as gambling. Perhaps Obama should take a look at ALL the laws in this country and review some of the arguments that have gone in front of the House Financial Services sub-committee. It makes me wonder if Obama cannot conduct something as simple as giving away a few seats at a football stadium without sticking his foot in it, how is he going to run the entire country?

It is also quite depressing as the best chance the gambling community has in seeing any recent legislation making it into law is an Obama presidency. But, as a fellow gambler told me the other day as we spoke about the recent political ads we see here on television, “I have greater concerns for this country than gambling laws”. Perhaps this is one of those glaring examples that show why he is voting for the Republican this fall, and his #1 reason for doing so - lack of experience.

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Though not of great anticipation here in the US, the Euro 2008 is underway. The 2008 UEFA European Football Championship, commonly referred to as Euro 2008, is the 13th edition of the UEFA European Football Championship, a quadrennial football tournament for European nations. A total of 16 teams are participating in the tournament. Austria and Switzerland automatically qualified as hosts; the remaining 14 teams were determined through qualifying matches which began in August 2006.

Many offshore books are offering betting on this huge soccer tournament, but the best by far is one of our old favorites, Pinnacle Sports. They contacted us this week and have provided our visitors with a newsfeed featuring the latest updates relevant for bettors. Check out real-time news, keeping players informed, on the homepage at osga.com. In addition, for players outside of the US, Pinnacle will be offering 1.96/1.96 style in-running betting on every game, as well as low commission outright prices, Group betting and a host of other exciting propositions. With Asian Handicaps and total goals markets priced to just 102%, 60% better than traditional bookmakers, Pinnacle Sports is the place to wager Euro 2008.

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One of the top supporters for Internet Gambling and one of our favorite Congressman is Rep. Robert Wexler (D-FL 19th). He introduced H.R.2610 to amend current laws to clarify the applicability of such laws to games of skill. This is commonly referred to in gaming circles as “Wexler’s Poker Bill.” In addition, the representative from Florida has also co-sponsored a bill by Barney Frank looking to regulate Internet gambling and most recently backed Frank’s bill to make the UIGEA unenforceable. He also supports the bill to conduct a study of Internet gambling by Nevada’s Shelley Berkley.

In all of the hearings on the past 18 months, since the passage of the UIGEA, Wexler has made his voice heard. Throwing up his hands and raising his voice while grilling panel members and speakers alike, Wexler has shown that he has a passion for this topic. He gets an A++ from OSGA for his efforts!! Congressman Wexler is Chairman of the Europe Subcommittee, a senior member of the House Committee on Foreign Affairs and the House Judiciary Committee, and he also sits on the Financial Services Committee, chaired by Barney Frank.

If you are a resident in his district or live close to Boca Raton in Florida, we urge you to attend to a Town Hall Meeting that he is holding on Monday, June 2nd, 2008 at 7:30 P.M. The Town Hall Meeting will be held at the Boca Lago Country Club at 8665 Juego Way in Boca Raton, FL. Congressman Wexler will speak about his efforts in Washington to end the war in Iraq, strengthen America’s struggling economy, and lower health care costs. However, he will also have time to take questions and comments from attendees.

We implore all gamblers to head to the meeting on Monday and let Congressman Wexler know you support his efforts. Ask him how his “Poker Bill” is doing (it appears to have stalled), and ask him what else can be done to support his efforts.

Click Here for a map and directions to the Town Meeting.

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This week we added an update box on the OSGA homepage so that visitors could see the movement on ANY of the Internet gambling legislation currently introduced in the House of Representatives. This area is updated as each new co-sponsor of one of these bills is added. However, this is only for Federal bills. In recent weeks several states have begun to stir the Internet gambling pot. Delaware and New Jersey are looking to add Sports Betting and an interesting bill on intrastate Internet poker has been introduced in California.

The bill that was introduced last month in California by Lloyd Levine (Assembly Bill 2026) asks the state to perform a study regarding authorizing intrastate Internet poker. This bill deserves some real attention from the players in California. This is a bill looking to legalize some form of Internet gambling! It is also a great challenge to the loopholes in the UIGEA, which, of course bans betting across state lines or country boundaries. The UIGEA does exempt three categories of transactions: intratribal, intrastate, and interstate horseracing. As defined, intrastate transactions are bets or wagers that are made exclusively within a single state, whose state laws or regulations contain certain safeguards.

This bill looks to have the findings of the study sent to the legislature by June 30, 2009. So far, it has gotten solid support in committee. Check out more on this bill, including an audio interview with the River City Group and Assemblyman Levine here.

One of the biggest reasons that these three states are looking earnestly at expanding gambling is each measure provides additional economic opportunities for the state. In both Delaware and New Jersey, recent reports have shown that gambling profits from casinos and slot parlors, and the taxes derived from them, are dwindling. That is why the New Jersey Senate last week had a debate over legalized Sports betting. In fact, NJ Sen. Raymond Lesniak is ready to sue the Federal Government claiming they are in violation of interstate commerce laws. Delaware’s House of Representatives approved a bill legalizing sports betting by better than a 2-1 margin, but this measure still has to get through the Delaware Senate and an anti-gambling govenor in Ruth Ann Minner.

We urge players to contact their State legislators and let them know that you support these measures and their efforts to see them become law.

Contact Califonia Legislators here.
Contact Delaware Legislators here.
Contact New Jersey Legislators here.

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We have reports that players from beleaguered and bankrupt sportsbook giant BETonSPORTS are begin contacted again. This time the email comes from Vantis, a forensic accounting firm in England that has been appointed receiver and liquidator of the now defunct sportsbook. We were given an advance copy of this email yesterday and have been working with Vantis since that time to clear up some of the inevitable questions..

The highlights of the letter provide insights into several of the questions that we have been getting from players every day for the last 22 months; “How much are we going to get?” and “When can we expect to get a payout?”

The answers two these two questions are more bad news and not what any of us want to hear. The email states, “we do not anticipate that any distribution to creditors will be any more than a few cents in the dollar.” Vantis also states that, “we do not anticipate reporting to you further until December 2008.”

This is most distressing news and we have already heard from several angry players who have written in to let us know that this is a “Ripoff” and asking, “Where did all of the money go?” We could not agree more! Why are there not enough funds to pay back the company’s previous depositors?

We did contact Vantis, and were informed that BETonSPORTS owes out double what we had been told from the exiting regime when the book was shut down. In addition, it would stand to reason that since less than 20% of the players who were owed money by BETonSPORTS replied and filed claims, that there would be plenty of money to satisfy their outstanding balances. However, it turns out that the company has only several million to settle outstanding claims; they fall over $25 million short of their obligations.

Vantis also mentions in their email that they are still actively seeking funds owed to the sportsbook from ‘substantial debtors based in various jurisdictions around the world’. They continue by letting players know that they ‘may now have to commence legal proceedings in those jurisdictions’. This could force this entire saga to continue for many more months; In fact, until the end of 2008 . . . at best. The last sentence of Vanits’ email reads, “As and when we have anything significant to report to you, we will write further, if not, we do not anticipate reporting to you further until December 2008.” OMG!

We asked the liquidators if they would consider making partial initial payments to players, while they continue to hunt for more player funds around the globe. We received no answer to this request. We also asked if there would be a ‘drop dead date’, where Vantis would stop looking for more money and stop looking for more BETonSPORTs players and untimately, make payouts. Again, no response. Vantis does appear to be working diligently to finalize these proceedings, but the end result will most certianly fall short of everyone’s expectations.

For those without email, Vantis may finally be ready to make contact. They have asked the High Court of Antigua for permission to contact those players by ‘mail & public advertisement’. However, we are not sure that these players will want the information that their online counterparts have received…..

So, this whole mess will be more than two years old in July and still nothing has been resolved. For a company that at one time was worth nearly a quarter of a billion dollars and had over 15 million in player deposits, one has to wonder where all of the money went. David Carruthers is still under house arrest, Gary Kaplan is still sitting in jail and players still have no money. No one has been brought to trial and this situation certainly has no justice. There are still plenty of sportsbooks operating around the world taking bets from US players. All the US government did in this situation was aid BOS in ripping off tens of thousands of people.

I think that both the BOS players and stock holders would agree.

Read the full email from Vantis here.

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