Pari-mutuel wagering, one of the few forms of Internet gambling allowed in the U.S., may face a little less illegal competition after a crackdown on an allegedly illegal $1 billion sports bookmaking enterprise.
While many of the wagers were not conducted on the Internet, the operation allegedly used local bookmakers and the Internet to conduct wagers and money transactions.
On April 10 the U.S. Dept. of Justice said 34 individuals and 23 entities have been indicted and accused of operating an illegal sports bookmaking business that solicited more than $1 billion in illegal bets. That's according to acting assistant attorney general Mythili Raman of the Justice Department's Criminal Division and Sanford C. Coats, U.S. Attorney for the Western District of Oklahoma.
"These defendants allegedly participated in an illegal sports gambling business, lining their pockets with profits from over a billion dollars in illegal gambling proceeds," Raman said. "Today's charges demonstrate that we are as determined as ever to hold accountable those involved in facilitating illegal online gambling by U.S. citizens, regardless of where the business operates, or where the defendants reside."
"The defendants cannot hide the allegedly illegal sports gambling operation behind corporate veils or state and international boundaries," Coats said. "I thank the IRS and FBI for their diligent work over several years to investigate this billion dollar international gambling enterprise."
According to the indictment, 42-year-old Bartice Alan King, aka "Luke" and "Cool," of Spring, Texas, conspired with others to operate internet and telephone gambling services first from San Jose, Costa Rica, and then from Panama City, taking wagers almost exclusively from gamblers in the United States seeking to place bets on sports. Known since 2003 as Legendz Sports, the enterprise allegedly used bookies located in the U.S. to illegally solicit and accept sports wagers as well as settle gambling debts.
The 34 defendants are alleged to have been employees, members and associates of the ongoing Legendz Sports enterprise. The 23 corporate defendants are alleged to have been used by Legendz Sports to facilitate gambling operations, operate as payment processors, own websites and domain names used in the enterprise, launder gambling funds, and make payouts to gamblers.
The indictment alleges that Legendz Sports sought to maximize the number of gamblers who opened wagering accounts by offering both "post-up" betting, which requires a bettor to first set up and fund an account before placing bets and "credit" betting, which allowed the bettor to place a wager without depositing money in advance through face-to-face meetings with bookies or agents.