DoJ’s Prohibition Seizure of Bodog Comes up Empty

Quite often you will hear today’s online gambling environment compared to the days of Prohibition in the late 20s and early 30s. And in typical ‘Untouchables’ fashion, today’s G-Men went after the Al Capone of the online industry – Calvin Ayre earlier this week. Tuesday a story broke outlining the indictment of Ayre, Bodog’s founder,

Quite often you will hear today’s online gambling environment compared to the days of Prohibition in the late 20s and early 30s. And in typical ‘Untouchables’ fashion, today’s G-Men went after the Al Capone of the online industry – Calvin Ayre earlier this week. Tuesday a story broke outlining the indictment of Ayre, Bodog’s founder, and the subsequent seizure of their original domain Bodog.com. But just like in the first hour of Brian De Palma’s Oscar-winning film, the Feds raided a warehouse that had been vacated. And vacated for awhile.

After the ‘Black Friday’ domain seizures in April 2011, many online gambling companies moved from their dot com domains to ones registered outside the long arm of U.S Law to prevent further seizures. Immediately there were .ag domains and ultimately many have moved to a .eu domain extension. That is exactly what Bodog did. In April 2011 they moved to a .eu domain and never looked back.

As far as Ayre, following the UIGEA passage in 2006, he sold his U.S. -facing Bodog brand to the Morris Mohwak Gaming Group (MMGG) in the Kahnawake Indian reservation outside of Montreal, Canada. MMGG ultimately let the brand licensing agreement expire at the end of 2011 and moved all of the former players to a new brand, effectively ending an involvement of the Bodog name or brand in the U.S.

When the story broke on Tuesday, there was immediately a buzz in the industry. Many of the folks that we speak with regularly in the offshore world were ‘not surprised’ and we got more than one, ‘it’s about time’. You see, Ayre became both the poster boy for online gambling and for everything that you would NOT want to do if you had an offshore gambling house that caters to U.S. players. Bodog advertised all over the U.S. on billboards, radio ads, in magazine and print mailers and even via a Las Vegas conference, and Ayre was seen as a jet-setting playboy, flaunting his ‘illegal’ business in the face of the G-Men. Many industry insiders believe that the industry started getting more heat than was warranted after Ayre was featured in 2006 in Forbes magazine as a new billionaire. The story was titled ‘Catch Me If You Can’ and it seems that the Feds have done just that. Well kind of . . .

We saw the story and immediately reacted. After a brief meeting we all sat by the phones and chat lines waiting for an onslaught of players to ask about the situation. The story hit the mainstream media and within a few hours there were hundreds of stories in Google News. We waited and after a few hours and just a handful of inquiries had another meeting. “Why isn’t our phone ringing off the hook?” How come our chats lines have had just 2 inquiries on this?” After all, this was big news.

Apparently not to players.

Unfortunately for the Feds, this indictment and seizure has had little or no effect on the current operation servicing Bodog’s former customers and online gambling in general. In fact, unless you follow online gambling news (most players do not), you might never have heard of any seizures. Players had not been using bodog.com for nearly a year and the newly minted website and brand had taken hold of players browsers on Dec 14th, 2011, when even bodog.eu became dark.

In addition to the lack of inquiries here at OSGA, a quick perusal of the top online gambling forums and social media sites saw very little attention given to the seizure. So little, that it became obviously that online players either didn’t know or didn’t care about the DoJ actions. We have seen many stories about Bodog being shut down, including one claiming this was the Feds ‘biggest prize’. Really all of this could not be further from the truth. There has been no interruption for players and it’s business as usual for the Bodog Brands that do not face the United States, as well as for MMGG and their new U.S.-facing website.

So after nearly a decade and untold hours of investigative work, the G-Men essentially found a ‘dry’ warehouse. At a time when the U.S. economy is reeling and the national debt is skyrocketing, the cost of an investigation that started with Internal Revenue Service investigators in Maryland circa 2003 and immigration and customs officials launching a formal investigation in 2006 is absurd. At some point with all of that manpower and money someone should have noticed that bodog.com was no longer a gambling site. And they also should have figured out that Calvin Ayre, who announced after the UIGEA passage that he would not set foot on U.S. soil, was true. It has been over 5 years since he said that.

Yes, the U.S. DoJ did grab another domain and did indict more high profile online gambling entrepreneurs, but this one has to leave a bad taste in the mouths of prosecutors. They basically got nothing – no one that they will ever be able to put on trial and no change in player activity. In the last round of seizures the government did force several large poker operators out of the US, did scare tens of thousands of players away from playing online and did end up shutting down a few operations that stiffed players entirely; all goals of the current regime. But this latest escapade by the DOJ would cause even Eliot Ness to throw his hat in disgust.

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