Off Shore Gaming Association

We had a report last week from a U.S. online gambler who, like so many, made use of NETELLER back in the mid 2000s when the EFT payment processor had a significant share of the online gambling market. Then, the UIGEA was passed in 2006 and almost immediately, NETELLER made an exit from the U.S. market. They paid back players after a delay of several months under an Approved Distribution Plan in conjunction with the U.S. authorities. Once the payout process was initiated, NETELLER reported that U.S. members would not be able to request funds after January 26, 2008. However, a final notice was sent out in July of last year.

This former NETELLER user received a call that said he had money still in his NETELLER account. He was unaware of any funds, but also never cashed out of his old NETELLER account. This former account holder said the he was required to send in some proof of ID and fill out a few forms to get his money. This player did extra due diligence, calling back the number provided and verifying that it was a NETELLER number. He did send in the required information as this all seemed very legitimate. But after a couple of weeks and no check, he contacted us here at OSGA.

We checked with NETELLER and today they confirmed our suspicions.

NETELLER management got back to us via email, indicating that this player and others may be the victims of a scam. “All former NETELLER account holders in the US have been contacted by NETELLER as part of the Approved Distribution Plan for residual account balances. A final notice was issued by email to registered email addresses on 15 – 16 July with the final acceptance date for receipt of withdrawal requests being 26 July 2009. Other than for requests already received and/or being processed, any contact after this date would not originate from NETELLER.”

This feels an awful lot like an identity theft scam. The alarming thing is that we know 100% that the payment processor is not paying out any more to U.S. customers, nor are the contacting any former U.S. customers.

If you get a call looking to ‘help you’ recover funds that were in NETELLER. Beware!! Do not give the callers any personal information and contact NETELLER at complaints@neteller.com. If you believe that you may have already fallen victim to this scam, please notify us so that we can continue to warn other potential targets.

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Today, beleaguered BETonSPORTS players were sent an update from the corporate liquidator of the now defunct sportsbook.

The process to pay back players who had a balance when the U.S. Department of Justice decided to arrest the CEO of the company has been going on for over three years. Initially players were given good news, that they would be paid. But then, the employees of the company were let go and the assets were turned over to Vantis, a huge accounting firm in England that handles corporate insolvency and creditor services. Vantis became involved late in the game and they are clearly making sure that I’s get dotted and t’s get crossed. Every six months or so, they produce an ‘update’ for players who are still waiting to be paid.

The latest update letter from today can be found here.

today’s release addresses the fact that Vantis is still pursuing more funds owed to the defunct organization. An update back in July from the company contained similar rhetoric. This most recent letter shows an alarming fact – vendors (trade creditors) are owed more than respondent players! And, not surprisingly, it also shows, as with any of this type of legal entanglement, the only ones really getting paid are the lawyers and the courts. Legal fees and other disbursements have managed to devour over 30% of the funds available or approximately $75 per player.

The note also addresses the recent plea and forfeiture of mega-millions by founder Gary Kaplan to the U.S. DOJ. Vantis states, “We immediately sought legal advice in the U.S. with a view to laying claim to a portion of these funds on behalf of the Betonsports creditors and after careful consideration of the options open to us we have now lodged a petition with the U.S. Attorney General under U.S. Remission Proceedings. We await the outcome of the Attorney General’s deliberations.”

OSGA contacted the Assistant United States Attorney Charles S. Birmingham almost immediately after the announcement of Kaplan forfeiting $43.6 million and was told that this was not BETonSPORTS money. Hopefully, Vantis has an experienced legal team and solid case logic working on getting a portion of the forfieted cash. Just a portion of these funds would be all that is needed to pay back every player AND creditor every dime owed. And that would be legal money well spent.

So, it does appear that Vantis is doing what is necessary to get the most money back for players. This most recent announcement is loaded with actual facts and appears to be very forthcoming to people who are out money from this entire debacle.

But, what it doesn’t give, and what we hear about daily on our phones lines, chat and email inbox is . . . “When?” As in, when will the money, whatever portion of it, be sent to customers? We certainly cannot even begin to speculate on payout dates after all this time has passed. If nothing revolutionary occurs, expect Vantis to bring us all up to speed in June 2010. In the meantime, check back here or our offshore report regularly for updates.

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We posted a report on Thursday from the Queens County District Attorney’s Office in New York stating that law enforcement officials throughout the country organized to bust a huge gambling ring and had some 27 of thirty defendants in custody. The operation called “Operation Betting It All” apparently had been ongoing for 38 months – more than three years! This story hit the newswires and almost every news outlet on TV and print, as well as Internet pundits, latched onto it.

Why? Because the government is continuing its scare tactics, so that gamblers will not play offshore or with online bookies. And, what better way to spread the word of the evils of Internet gambling than to have a headline that includes the words multi-million dollar, Internet gambling and the coup de grace, organized crime.

Every report we found, from this one at NY1 to the Associated Press, loves to say a ‘half a billion dollar’ operation and feels the need to indentify Joe Fafone as a Gambino associate. The government claims to have already seized 3 million in assets and are looking for $125 million more from the defendants. Pretty good haul for New York’s coffers if it really pans out! The government has already gotten huge amounts of money from some of their strong arm tactics and recent arrests just this year – $34 million from ex-BETonSPORTS headman Gary Kaplan and $105 million from PartyGaming, the online poker and casino operator, who agreed in April to pay a penalty as part of a “non-prosecution agreement”. In addition, the government is not done shaking down foreign corporations as Sportingbet PLC believes that it will also reach a settlement with the U.S. DOJ this year.

After reviewing the document from the Queens D.A., which reads more like a feature article than a press release, it appears that the target of the investigation was Joe Fafone and an alleged sports betting credit operation that ran across several states here in the U.S. However, the D.A. appears to have blurred the lines between a long-standing credit operation and the post-up shop in Panama. In addition to identifying several credit shop websites, the press release also mentions industry giant BetOnline.com. The release states that the defendants were unlawfully operating a sports betting enterprise that stretched from Queens County to Nevada and from Rochester to Florida. However, BetOnline is a Panama corporation and does not offer credit to any players.

It also appears that the government has been following the Fafones for some time. A quick search provided “Operation Goodfellas” from 2002 where Joe Fafone and his father were linked to organized crime and an Internet betting operation in Costa Rica. So, it does not appear that the Panamanian sportsbook was being targeted, more like the guy the government claims to be the head man.

There is nothing new or unique about these kinds of indictments. There have been many similar charges and convictions in the past ten years. In 1999, a federal grand jury in Manhattan charged Jay Cohen, one of the owners of World Sports Exchange, with conspiracy to violate the Wire Wager Act and seven other counts. Ronnie Sacco, BetWWTS, Rick from Gold Medal and others have all been caught in the crosshairs of ambitious prosecutors looking to gain publicity in the news. All of these operations either stayed in business or been sold to reputable operators. And of course, the biggest splash ever made by U.S. officials, affecting over 70,000 bettors, was the 2006 arrest of BETonSPORTS CEO David Carruthers and subsequent meltdown of the company.

Though this is a significant arrest, does the government ever hear what they are saying? Queens District Attorney Richard Brown stated at the press conference, “In this case, I believe that we will make a significant dent in the illegal gambling nationwide.”

Really? I would wager that 95% of the players using this operation either 1) have another bookie, 2) have an Internet post-up account or 3) are looking for another bookie to play with . . . right now! The websites mentioned in the press release are all still operating and from what we have found out, will continue to operate; As will the thousands of other gambling sites that U.S. citizens can play at. And, as far as local bookies in NY and FL, I am sure that their services will be offered to any of Fafone’s alleged customers.

The bottom line is that this latest arrest is just another in a long series of government moves to stop something they can’t prevent. Illegal street bookies have been getting busted since the leather helmet days, yet every town nationwide has at least one. The largest U.S.-facing sportsbook was taken down and more sites have continued to pop up and take bets from U.S. players. Someday, we hope that the government realizes that gamblers are going to play, to bet, to wager. The only way for the government to get involved (read tax) other than the occasional arrest, is to regulate and tax the Internet industry and allow sports betting in U.S. land-based casinos. Maybe then, alleged ‘Mob connections’ won’t be booking a half a billion in wagers. But, there would also be no headlines to grab.

Ultimately, we wish all involved the best of luck in facing these charges. And, we expect this situation to play out very similar to the Jay Cohen/WSEX case, where the corporation located in Panama will continue to operate, while the alleged principles wade their way through the U.S. judicial system.

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Payouts, Payouts, Payouts. This is what is on every players mind right now, especially after several weeks of favorites winning. The OSGA inbox, Live Chat and phone lines have been buzzing with questions from players who want to know who straight answers to players’ #1 concern.

The most frequently asked question since the start of the football l season is, “Why is my book taking 5 days or up to a week or longer to get me a payout by check?”

We have gotten this question frequently but also have had an inordinate amount of players make the same inquiry regarding one of the top books – OSGA Elite-rated Bookmaker. Several Bookmaker players have been quite irate when they are told that their check will take 7-10 days to arrive – even via the more costly delivery option of FedEx, DHL or UPS. Obviously, these players have not requested a payout for some time from any book offshore. Bookmaker and MANY other books have been using similar time frames for check payouts for over a year. At least Bookmaker is very up-front about their check times and do not try to deceive the customer in any way. In fact, here at OSGA we use the 7-10 day time period as the benchmark for whether or not a book is paying fast via check. Less than a week is great and more than 10 days is a bit long. As far as check payouts, we have heard very positive feedback on both Heritage and BetJamaica where checks have arrived within a day or two.

Our Advice: Relax. With Bookmaker or any solid shop, these checks are like money in the bank. In addition, from both first hand knowledge and customer feedback, the checks from Bookmaker are like clockwork – ask for one on a Monday and have it in your hands by the middle of the following week.

Bottom Line: If you are playing with a reputable outfit, do not sweat the wait time for a check. Players may be tempted to jump ship for a book that promises a check in 72 hours. But with the ever-evolving payment processing system, there is not a single sportsbooks that can guarantee payout times – for any method.

We also have seen this question over and over again. “Who is the fastest paying?”

We usually respond with something smart – like “What day is it?”, as the payout situation is always changing. Reports indicate that YouWager is one of the fastest with Western Union payouts – generally getting them to player the next day, if request by noon the previous day. BetPhoenix does not have WU as an option right now but their MoneyGram payouts are also within a 24 hour window, many can be done same day. The typical time frame is 72 hours, most top books can guarantee a control number within 2 days of request.

Our Advice: Wait until after the payout crunch time on Monday if you do not want to become frustrated.

Bottom Line: Reputable sportsbooks want nothing more than to pay players quickly. Have some patience, as limits are in place with WU, Moneygram and checks. If your book imposes limits, they are generally being dictated by the third party processor. And, as in the response above, if you are with a top book, the person-to-person transaction is like money in the bank.

Finally, we have had several inquiries about using gift cards or re-loadable credit cards to fund an account.

These cards are becoming very popular because 1) they work and 2) they are easy to reload. Keep in mind that sportsbooks treat these deposits as credit card transactions so bonuses may be smaller and you will most likely have to fill out forms, as with any credit card transaction.

Our Advice: Re-loadable cards are a great method when they go through. Test out any new cards BEFORE you load it up with a bunch of money. AND, (very important) do not shred the card after you are done using it, while you are still playing. You may need to fax in the front and back of the card, just like with any Visa or MasterCard deposits.

Bottom Line: The re-loadable cards are growing more popular as they appear to be very effective. However, payouts can not be issued back to these types of cards, so be prepared for forms and potential delays due to getting the payout via another method.

Check back here frequently, as moving money to and from Internet gambling sites is in violation of the UIGEA. This means that until that law is repealed or changed, the payout situation and deposit method are going to be constantly in a stat of flux. If you play somewhere that has given you a fast payout, please post it in the comments below.

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There was big news this week regarding the outcome of the plea from former BETonSPORTS kingpin, Gary Kaplan. Kaplan pleaded guilty last week. As part of the plea, he was forced to forfeit $43.6 million of his illegal gambling proceeds. This week the U.S. Department of Justice put a notice out on its website stating that it was giving ” notice of its intent to dispose of the forfeited property”.

Was this the miracle that former BOS players were looking for?

We heard from players by the dozens since this story broke on Wednesday on a small BLOG in the Midwest, “Feds Let Online Gamblers Lay Claim to BETonSPORTS’ Founder Gary Kaplan’s $43 Million, Beginning Today” blazed the headline from a BLOG on the Riverfront Times website. This was such a huge turn of events, possibly bringing to an end the three-year ordeal, that we heard from advertisers, former BOS employees still working in Costa Rica, and of course, players. These players, as could be expected, were rejoicing, at this sudden blast of great news. However, may gamblers see the glass as half full and we had several players also ask us if they would be prosecuted for laying claim to their funds.

However, players, nor advertisers, nor anyone really, will have a shot at the $43 million.

We immediately contacted Vantis, the corporate liquidators, responsible for paying players and most recently vendors who were owed money at the time of the BOS shut-down. They informed us that yes, they were in talks with the DOJ. But they would not comment further.

This news made the glimmer of hope burn slightly brighter.

But, a subsequent conversation OSGA had with Assistant United States Attorney Charles S. Birmingham extinguished any hopes for players.

Birmingham said point blank in an exclusive interview, “This is not the money that players sent in, this is not BETonSPORTS money.” Yes, according to the DOJ, this was money that Kaplan had earned operating BOS, not the money players had deposited or won. Birmingham went on to state that the $43 million was recovered by the government as forfeited, criminal proceeds.

Apparently, whenever the government gets ‘illegal criminal proceeds’, whether it be a house, Mercedes or cash, a notice is put out for people with legitimate claim to it. There are hundreds of these notices on the government’s website. For example, if a car was bought by Kaplan the day before he was arrested and the dealer let him drive it off the lot the night before he went on the lamb, the car dealer could apply for restitution. We doubt that many will stand up here.

We also found out, that though there are no laws specifically against a person placing a bet online, anyone who did fill out the form for their claim on the money may have to look over their shoulder for a bit. “We would have to look at any requests very closely”, we were told when posing the players’ question to the Assistant U.S. attorney.

So what is the money going to be used for? “Law enforcement purposes”, we were told by Birmingham. He cited the last time such a large amount of forfeited funds came in, a children’s program was funded.

Little solace for the thousands of BOS players.

Birmingham added that players should continue to pursue their money “through the liquidators”. He means Vantis, who is still working on it….

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The third anniversary of the arrest of BETonSPORTS’ CEO David Carruthers was last Friday. Players are still waiting for their dough. Or someone to tell them when they will get their dough. Or at least, verify the payout percentage that has been talked about so far.

So, three years and one week after this whole mess began, Vantis, the publicly traded, London-based account firm contacted players using email (it’s free). However, players did not get the response they were looking for. They were told to hang in there….Vantis is working on it.

The email states that they are still looking for corporate records, some of which are in Costa Rica. They may find Bin Laden before they find these records. The company ceased its operations there in late 2007 and unless there is a tin-covered storage shack somewhere in the hills of San Jose, any records there must be long gone by now.

Like the money. Long Gone. For a company that was worth 250 million or more on the London Stock exchange prior to July 2006, what happened to all of the money?

The Insider found out from a very reliable source several weeks ago that court proceedings were taking place in Germany for $2 million that was in a BETonSPORTS account at the time of their demise. Repeated emails to Vantis to verify our findings went unanswered. The email sent to players this week confirms this tip. This is good news for everyone waiting for money and it does show that Vantis is actively seeking more money for players.

OSGA has been told as recently as November 2008 that the figure that currently being held in escrow to pay players is two million USD (we had originally been told three million by BOS). Vantis states that player claims are $8,078,073. And, in a new twist, trade creditors, never mentioned before, agreed to some $5,808,012 more. That’s nearly 14 million.

And really, should trade creditors even be involved in any type of monetary settlement? They never deposited with this company. They were never lied to that their funds were secure. Many of these companies have fed off of the gambling industry for year and should ‘take it on the chin’, as so many players have had to do over the years.

I was never very good at math. But if there is 2 million available right now, that would mean that players should be getting nearly 15% (13,866,085 x 15% = 2,082,912). However, they are being told 5%. And, if Vantis recovers 2 million more, that’s an extra 15% for players. We have asked Vantis to clarify the percentage and if vendor-creditors will be getting the same percentage as player-creditors.

Players who have contacted us in recent weeks are growing very weary of the situation, as are we. Several calls and emails start by mentioning just how long this has gone on and ask, “Shall I just forget about this?” For players who have waited this long, there does appears to be some movement in this case. We have asked Vantis again if there is a time-frame for payouts but urge players to hang in there.

We are awaiting answers from the corporate liquidators.

We hope that Vantis is able to get the $2 million that they are in court seeking. However, we urge them, once there is two million more in the coffers, disperse what is there. After more than three years, end this ordeal for everyone. A final figure of $4 million would yield players at least 25% (13,866,085 x 25% = 3,466,521) of what they were owed. That’s more than shareholders received, more than ex-BOS employees got and certainly more than David Carruthers got.

The e-mail sent to BETonSPORTS players from Vantis can be found here.

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