5Dimes New Jersey Offensive Begins
Following the tragic death of her husband, William Creighton’s widow Laura Varela is now looking to continue his legacy and strike a deal with the State of New Jersey.
If successful, she would be able to bring 5Dimes, the brand her husband founded and pushed to the top, to the state, and operate it legally.
After 5Dimes announced a withdrawal from the United States market in the capacity of an offshore operator in September, and then settled a $46.8 million money-laundering investigation with the Department of Justice (DoJ), Varela finally has some legal grounds to try and relocate 5Dimes to the US betting market.
To this end, she has brought on some heavyweight gambling industry lawyers who are going to help her in Philadelphia and Washington as Varela attempts to embark on the most ambitious project on her life and bring the 5Dimes brand and thousands of customers into the Garden State sports betting market.
New Jersey is not just a leader in the US market in terms of sports betting handle, an early adopter of online betting and the reason why we have sports betting recognized on the federal level. It’s also a state open to promising projects in the gambling industry, even if 5Dimes is effectively a “bad actor,” that is to say a sportsbook that catered to US customers without having the permit to do so.
Vying for a Share of the Market, Driving Results Up
Given the massive settlement, though, the New Jersey Division of Gaming Enforcement (NJDGE) – and more importantly the Casino Control Commission – may turn a favorable eye on 5Dimes. Should the company’s entry bid be successful, 5Dimes would have to elbow its way through brands such as DraftKings and FanDuel for a share of the market, an ambitious goal altogether.
Yet, 5Dimes has one thing that other operators are only warming up to – the ability to run a multi-billion revenue book. 5Dimes has handled, for years, what is described as billions in bets each year, catering not only to the United States but a global audience as well.
Sure, the rules of the games change once you enter the regulated market, but what if sportsbooks are missing something that 5Dimes isn’t?
From a legal standpoint, it would make a good opportunity to test whether offshore sportsbooks could be invited into the ballpark of legal operators, cutting the lifeline to the unregulated market and pouring $150 billion more into states across the entire country in sports betting handle.
That is taxable money. Of course, not all $150 billion is taxable, but rather the net profit generated by a sportsbook. Even then, though, it would be a travesty to miss out on such colossal opportunity.
5Dimes Has a Solid Legal Case
The operator’s own history is a little patchy. 5Dimes did get into hot water because of the use of Amazon gift cards, false names, and third-party credit card processors allowing the transaction of money illegally out and into the United States. Even then, the operator may have a case for re-entering the country through the front door, and that is where the settlement comes in.
According to Mike Lowe from the DoJ’s economic crimes unit, the settlement between Valera and the federal government is sufficient grounds to join – or at least try – the legalized sports betting market. “It opens the door for Ms. Varela to get licensed in the US,” said Maria Carrillo, a DoJ attorney.
New Jersey Yet to Make Its Mind
The NJDGE is an interesting spot. The regulator expects integrity and responsibility, financial stability and good character from any applicant. Furthermore, the watchdog also requires that any would-be entrants aren’t associated with illegal activities.
Does 5Dimes make the cut? The brand has certainly violated at least a few of these principles, a fact that the settlement may now expunge, at least from a legal standpoint. Yet, it would be solely within the remit of New Jersey’s competent authorities to decide.
New Jersey Casino Control Commission spokesman Michael Pollock says that it’s a huge IF whether 5Dimes can actually make it into the legal market:
Yet, the fact that Varela’s husband was kidnapped and murdered and that she herself wasn’t involved in any of the activities gives the sportsbook the grounds to potentially pursue an opening into the market.
Another thing to consider is the fact that if the NJ Casino Control Commission extends a hand, it may signal clearly and unambiguously that there is no reason for offshore brands to stay aloof and distant when a middle ground is perhaps available.
Each of the offshore brands is estimated to handle at least $2 billion in bets every year, giving them an overwhelming control over sports betting. In a way, offshore brands are the weathervanes of the industry, able to bank on opportunity and transform it into a multi-billion business.
How Much Does It Cost to Play in the Big Leagues?
Yet bringing them onboard could leave the unregulated market undernourished. There is a bit of a drawback for the brands, though. For example, some of them are global operators, meaning focusing on the United States alone could cut them from other customers.
Yet, they could just as easily establish an international operator and focus their main brand name on the United Market, tipped to be the world’s second largest by 2030.
Whatever the solution, it would not be cheap for offshore brands. They would need to find a land-based operator in the state, possibly pony up for a costly settlement with the feds, and lastly enter in unfamiliar territory and play by the rules that – for the first time – they would not be setting themselves.
This article is a reprint from GamblingNews.com. To view the original story and comment, click here.