Federal Prosecutors Continue Against Legitimate Off Shore Gambling Operators

Yesterday, the DoJ filed a 96 page indictment against Legends Sports based in Panama along with 34 individuals connected to the company and made many arrests. Yet this gambling sting will most likely not affect player accounts or day to day activity.

Yesterday, the DoJ filed a 96 page indictment against Legends Sports based in Panama along with 34 individuals connected to the company and made many arrests. Included were three first names that are likely very familiar to OSGA readers – Luke and Sandra from Legends and Spiro from The Greek. According to the indictment, the DoJ has been following Legends Sports for years and has intercepted email and messaging correspondence which shows that the company was involved in bookmaking operations and suggests they were also involved in money laundering by transferring money from profits of Legends sportsbook owner arrestedthe operation to personal accounts of those that owned the company. Of course this is precisely what the owners of every business in the United States do daily, but somehow the DoJ has determined that in this case those transfers were a form of money laundering. As for Spiro, it appears his big crime was lending money to Legends years ago to help them set up a call center in their large, land-based facility on the outskirts of Panama City. It is uncertain how that exactly is a crime against the U.S. government but no doubt the details will come out in court. The DoJ is looking to seize $1 billion which it states is the amount Legends took in from operations dating back to 2003 when it operated as MVP Sports in Costa Rica. Included in the amount that the DoJ is looking to have forfeited are bank accounts (personal and business), financial holdings, real estate, cars and a personal jet.

These arrests follow other indictments in the last 2 years against offshore sports betting sites Pinnacle Sports, BetOnline, Bodog and Bookmaker and the poker sites Full Tilt, Absolute Poker and PokerStars. Ironically all the sports betting sites are still operating and PokerStars, through its parent company The Rational Group, are looking to purchase an Atlantic City casino and are applying for poker licenses in numerous states across the U.S. This comes after Rational cut a deal with the DoJ which gave the government a tidy sum of extortion money while also paying back American players who were about to take out their frustration against the government at the polls when it seemed that the DoJ actions against Full Tilt were going to cost thousands of poker players hundreds of millions of dollars in post up funds.

There was a lot of hope in the gambling community that Obama and the Democrats were going to cut back on their attempts to prosecute offshore gambling operators but the indictments and persecution has actually increased. Mind you that certainly wouldn't have surprised a former DoJ agent who I made contact with back in the George W. Bush days who assured me that these prosecutions would have to continue because they are easy targets and easy money. At the time the agent said that these offshore gambling companies represented billions of dollars in potential revenue to the DoJ and "there wouldn't be one public tear shed as a result of their prosecutions." Whether the arrests are reasonable or in the public interest are irrelevant because it brings in revenues and diverts focus away from the real issues of the day. The American economy is still struggling thanks almost exclusively to the greed of the banks and insurance companies in 2007 but to date there hasn't been a single arrest related to the financial crisis. And the DoJ agent was clear at the time that there would never be an arrest because digging too deep into the reasons for the crisis would bring up skeletons that they weren't prepared to unearth. And more recently issues relating to gun violence are too sticky for the DoJ to get involved with at length since it risks of a war with the NRA that the government isn't prepared to take on. So the government is taking the easy way out by arresting a bunch of individuals that 99% of the American public don't know and really have no reason to care about and try to justify that as a reason for their existence in hopes it will stem off anger against the government for the crumbling economy, increased gun violence and the lack of jobs. The DoJ will say "look we made a billion dollars for taxpayers and are getting "dangerous criminals" off the streets (of Panama)."

The truth of course is that these are above board individuals operating legally in the country that provided them a license to take sports bets in the country they operate and to which the WTO has told the U.S. are operating perfectly legally by international law. But as we all know the U.S. government and the DoJ just see the WTO as a nuisance when they don't agree with their rulings. If the DoJ truly wanted to get companies and individuals that are operating illegally and which do pose a threat to the American citizens they should go after the scam operators (of which there are many) and more importantly the underground bookmakers who happily take bets from American citizens and will also break their legs if they don't pay up. That's one of the things that is most upsetting about the continual assault on legitimate, licensed off shore operators. The biggest and best companies are the ones the DoJ has been targeting, leaving the American public to play with sometimes very unscrupulous operators or individuals.

"I can say that if you add up the complaints registered with OSGA in the last TWO years against BOTH Legends and the Greek, the number is still the same, ZERO," said Jim Quinn CEO of OSGA.

We have spoken to management at Legends and were told that the indictments will not affect player accounts or day to day activity. Looking at the other sites like Pinnacle and Bookmaker there's no reason not to expect that to be the truth. These after all are well designed and managed companies that would have had some plans in place in case of DoJ arrests. Certainly if Sam Walton were go to jail, people would still be able to shop at Wal-Mart.

Another round of arrests by the DoJ, and thus more scare tactics . . . and for what? The arrest are frivolous and don't in any way help the public interest but then as far as online gambling in the U.S. is concerned, what else is new?

Contact Hartley via email at hartley[at]osga[dot]com.

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