Off Shore Gaming Association

Gamblers across the U.S. are being greeted this week with an extra envelope in their mailboxes. But once they open them, many are shocked and disgruntled at what they find.

As we reported two weeks ago, the liquidation of BETonSPORTS was all but complete. Among the only things left to do for the liquidators, FRP Advisory, was to send out checks to former players. At the time, FRP Advisory stated that checks would be going out at the end of June. Today, many players did receive their checks as part of the “BETonSPORTS PLC settlement fund”.

However, several players we spoke with were shocked when they opened their envelopes and saw the meager amounts of their checks. “I was happy and excited to get the envelope,” said one payee. Then when I saw the amount of the check, all that went away.”

We had reported several times since 2011 that the amount for each player would be quite low. Apparently, FRP Advisory was not able to recover as much as they thought and everyone hoped. Even after speaking with BOS, then Vantis and finally FRP Advisory, we felt that players would get at least 10% back. But the final figure paid out was literally pennies-on-the-dollar – 4.62 cents to be exact.

Everyone wants to know where all of the money went. Well the fact is that once the dust settled following the arrests, there was almost nothing there for the liquidators to distribute. FRP Advisory did chase down some of the funds, but also was unable to recover several million that could have been used to up the payout percentage.

FRP Advisory did post their final report as promised on June 30. The report is not only a complete accounting of the money, but also details the efforts that were used over nearly four years in the recovery process. The full report is available here.

We did get a note today from FRP Advisory, who has been very responsive throughout this ordeal.  The email stated the “first and final” distribution had been made. We expect that all players will be getting their settlement checks by the end of this week, putting an end to this dark chapter in the history of offshore wagering. A chapter that really started the latest war being waged by the U.S. on Internet gambling houses.

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This July 17 would have been 5 years. Five long years since the BETonSPORTS corporation was indicted by the U.S. Department of Justice, shut down and ultimately went bankrupt. But players who have been waiting all of this time to recoup a percentage of their money lost in 2006 may only need wait another week or so to finally be paid.

We contacted FRP Advisory in England several times this month to confirm what we had reported back in December was actually going to materialize for players. According to a spokesperson for FRP Advisory, players will receive a portion of their balances refunded beginning next Thursday, June 30th. We were told “A distribution is scheduled to be sent to players that have agreed to their claims on 30 June 2011″. Checks will be sent to players mail addresses that were registered with the now defunct Vantis or FRP Advisory.

The biggest question has always been “How Much?” Well, the final totals are in and players can expect to receive a paltry 4.63 cents on the dollar. For example, a player owed $1,000 will receive $46.30.

Of course this low figure is an outrage to many (including the OSGA). Legitimate players who were owed less than $125 will end up getting nothing after all of this waiting. FRP Advisory told us that the total assets recovered in the period since September 2007 (when the original Vantis company was brought in) have been slightly in excess of three million dollars ($3.03M). The total amount to be distributed to creditors will be roughly $1.3 million.

Less than half is not what anyone wants to hear, but the liquidators have been involved for over four years. Just the costs of making the payouts are eating into player’s returns. Keep in mind the liquidators have put a great deal of time and effort into this case and do deserve to be paid for efforts getting players at least these few dollars. FRPAdvisory told us that a “final report detailing costs, including liquidation fees, legal fees and other costs and expenses will be issued at the time of distribution to creditors.” Liquidators’ costs have been approved by the High Court in Antigua, which is a requirement where the court makes the liquidation appointment.

Since the arrest of David Carruthers in 2006, the OSGA has been one of the few media sources consistently reporting on the process to pay back players. We published our own form well in advance of Vanits and created a database for players without Internet access or who could not get in touch with the liquidators. We personally verified that over 800 players who had filled out the BETonSPORTS claim form on the OSGA website or contacted us prior to 2011 have all been processed and will be paid.

Though the final payout figure is extremely disappointing for a sportsbook with a market share in excess of $200 million, we are glad that this ordeal will finally come to an end and this dark chapter in the history of Internet gambling will ultimately be closed. The OSGA will exercise due diligence in posting the statement from FRP Advisory, once it becomes available.

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Here at the Off Shore Gaming Association, we get hundreds of inquiries every month. We get questions on online sportsbooks, casinos and poker rooms, in addition to a vast array of legal and scam requests. One case that has gone on for over four years is the liquidation of the former BETonSPORTS company and we are still getting inquiries on the case, especially since players have heard nothing for over a year.

In 2007, a forensic accounting company in England, Vantis PLC, was appointed by the government of Antigua to liquidate the assets of the sportsbook giant. However, Vantis itself ran into trouble early in 2010 and was forced to sell off the division in charge of the BETonSPORTS case. Vantis Business Recovery Services was sold in a management buy-out to existing Vantis partners for an undisclosed sum and a new firm, FRP Advisory LLP took over the operations in June of this year.

We feared that all hope was lost for players.

However, here at OSGA we are determined to see this case through until its end. Thus, after investigating for most of the summer, we were able to find out that many of the key people who assisted us on behalf of players in 2007, 2008 and 2009 were now in similar positions at the new company, FRP Advisory and that the company was working toward a resolution. We have been in contact with the new company and this week did get an update for players. This is very preliminary information and we expect to have continued updates in the coming days and weeks.

Several orders have been made by the High Court and the financial/gaming regulators (FSRC) in Antigua. These orders are providing for FRP Advisory to make one final attempt to contact players/creditors via national newspapers in Antigua and the U.S. As of our latest correspondence, the final submission of outstanding claims to the liquidators will be March 31, 2011. This cutoff date will finally enable the liquidators to be able to make payouts to players and creditors. A final distribution of funds to gaming and trade creditors should be completed by no later than June 30, 2011.

Still, we were still not given a concrete answer to the big question on players minds, “How Much?”, yet reports indicate only a small percentage will be returned to players. Though this is still ongoing, at least now a timetable for closure and distribution has been scheduled and agreed by the Court. Hopefully, before the 5th anniversary of this ordeal next summer, players will get some funds back and this ugly chapter in Internet gambling can be brought to a close.

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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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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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