You're not paranoid if people really are coming after you, so the rising
level of paranoia among people connected to the off shore sports betting
industry is most definitely based on reality.
The concerted effort by U.S. government agencies to take down leading
online sports books is not a figment of anyone's imagination. Why any
government in possession of its faculties would want to preclude
participation by its citizens in a thriving area of commerce which has
gained global acceptance, except in the U.S., is a question that needs
to be addressed by our so-called leaders.
The puritanical and moral zealotry wielded by government officials in
pursuit of an anti-gaming campaign, steeped in hypocrisy and infused
with attitudes left over from the Salem witch trials, is nothing short
of a disgrace The strategic and profitable head start that non U.S.
companies are building in a most promising business brings tears to the
eyes of anyone who believes that artificial roadblocks to economic
opportunities should not be imposed by government.
Since 9-11, the Beltway Boys have expanded their ruling powers through
the Patriot Act under the guise of protecting the country.
Unfortunately, the autocratic implementation of these new statutes in
the name of security frequently causes them to be bent out of shape. Our
government still adheres to an ignominious policy that insists, "We had
to destroy the village to save it."
On a bad-guy scale of 1-100, terrorists are 100, gamblers are … well,
you set the number.
The latest assault on the freedom of American business as well as
citizens' lifestyle choices is the chilling attempt brought by federal
and state authorities to halt advertising of online gaming companies.
A syndicated article in the January 13, 2004, Las Vegas Review-Journal
noted that the Department of Justice had issued three waves of
subpoenas, intended to "intimidate and discourage publishers and
broadcasters from accepting advertising from online gaming sites." The
papers were served between September and the end of December, demanding
all records involving ads by offshore gaming companies since 1997.
In a country where individual rights and freedom of the press are
guaranteed by law, these tactics are outrageous and disgusting. American
Civil Liberties Union, Nevada, general counsel Allen Lichtenstein was
quoted as calling the DOJ's action an "intimidation tactic to go after
the messenger."
Rather than try to expose this ill-conceived campaign on a grand scale,
which would require more verbosity than we are comfortable with, let's
take a look at a single example – one in which we have personal
experience.
The Department of Justice, IRS and Post Office are investigating
employees of Carib
Sports for alleged money laundering activities and ownership of the
offshore sportsbook.
Right here let us state that Carib Sports is alive and well. Several
months ago it experienced some website problems because it is a complex
system, we are told. Experts were called in to change key configurations
and the site was quickly restored to normal with the capacity to handle
even greater traffic.
Carib originated and operated out of Antigua in the early 1990s, where
it was regulated by the Government of Antigua and Barbuda which enforced
stringent requirements for its licensees. The book was one of the
offshore pioneers which persevered as the industry early on was
tarnished by fly-by-night operators.
It took Antigua a while to tighten up licensing regulations, but the
island finally got it right. Strict laws dealing with that problem as
well as money laundering have been put into effect and are enforced.
In 2001, Carib relocated to Belize, where it again was operating legally
in a jurisdiction which licensed gaming operations.
Carib has earned an exalted position as one of the most prosperous shops
in the industry due to the efforts of a small group of savvy advisors
and consultants. These men are well versed in the subtleties and nuances
that separate successful bookmakers from the also-rans.
Most visible among them is Jon Rogers, with a long history of various
bookmaking efforts, who handled marketing and also contributed
day-to-day operational expertise.
Dealing with sports bettors is a labor-intensive business and the best
stores are those that keep all clients -- from wiseguys to recreational
players -- satisfied. Carib's instinctive understanding of this
principle, along with its policy of prompt payments allowed it to enjoy
extraordinary growth every year.
However, due to what is perceived as a vendetta by the feds against
Carib, last year was the first time the sportsbook did not maintain its
previous rate of growth. Based on recent activity, that is seen as a
"temporary glitch," we were told.
So why did the feds focus on Carib as a target? Simple. The book has
always been actively marketed. Rogers was instrumental in building the
company's volume and helped it achieve and maintain a sold gold
reputation among the offshore books.
So Carib got noticed.
But a lot more than high visibility contributed to Carib's being
targeted for action by the feds. It appears the U.S. embarked on a
sting-like strategy to ensnare Carib, along with other Antiguan gaming
companies.
Upon being brought to light, this nefarious activity gives off the
stench of a decaying fish, and is an embarrassment to the feds rather
than a badge of investigative honor.
According to information we obtained, the U.S. Government is accused of
falsely representing itself as wanting to be a partner to Antigua, using
a cover story that alleged the U.S. would help Antigua regulate its
burgeoning online gaming industry.
The rationale for offering such "assistance" was phony U.S. concern over
protecting players and an interest in helping the industry evolve.
C'mon, when was the last time Big Brother exhibited even the slightest
interest in providing bettors with recourse to being scammed?
So, it turns out that the dirty reality and the feds' true purpose was
to infiltrate the industry to obtain information heretofore unavailable.
That enabled them to prosecute U.S. citizens who were lawfully engaging
in the very business the feds were helping "regulate."
Based on an examination of documents which reveal what transpired, it is
clear the U.S. never intended to be helpful to Antigua, but instead used
duplicity and double-talk to burrow its way into data is had no right to
see.
By the time the plot was uncovered, the feds had begun prosecuting
operators from Antigua, wreaking havoc on what had been a well
established and regulated industry.
Essentially, the U.S. government's motive in unleashing its legal
tsunami against Antigua is to prevent millions of dollars in wagers from
leaving the U.S.
Antigua retaliated by taking the U.S. to the grievance committee of the
World Trade Organization. It charged the U.S. with unlawful restraint
and interference with the jurisdiction's profitable and fast-growing
online gaming industry. According to Antiguan Prime Minister Lester
Bird, 75 percent of the islands' gaming organizations left the
jurisdiction.
The WTO has heard the case and deliberations are underway. A decision is
expected in March. It is worth noting that testimony from other nations
was instrumental in supporting Antigua's complaint vs. the U.S.
Meanwhile, back at Carib, Jon Rogers continues his efforts to recover
more than $1.6 million confiscated by the government which,
incidentally, still has not charged him with anything, and simply says
he is the target of an investigation. Presumably, they are awaiting a
decision in the WTO case.
Earlier in the column we cited a personal interest in this story. Here
it is. We were visited by two IRS agents and a postal department
investigator who are involved in building the argument against Carib.
To their credit, they did not come off as Gestapo-like agents. They were
cordial, pleasant and inquisitive. The focus of their inquiries was
related to financial activity between our publications and Carib
Sportsbook. Particularly advertising payments to Players Choice and
Players Guide, the magazine we published from 1994 to 2001.
We answered all their questions to the best of our ability, noting that
Carib generally paid by check. Moreover, although we don't have check
stubs, we don't remember ever getting a check from Carib drawn on an
American bank.
They wanted to know about when we visited Carib and whom we met with.
All of our visits to Carib, both on Antigua and in Belize, are well
documented in our Sportsbook Scene column coverage of same.
We provided the agents with old copies of Players Guide, and a few
issues of Players Choice, the tabloid newspaper of which we suspended
publication in September but have resumed as a weekly magazine.
The investigators asked us who owns Carib, and we responded that we
didn't know, since we have never been privy to any official documents
which would reveal that info.
The impromptu visit did not upset us, or leave a bad taste in our mouth.
We realize the folks who questioned us have a job to do. But we did
offer the observation that going after Carib seems to be a waste and
misuse of government resources.
Given an unfriendly world that views America as a blundering giant with
a bull's eye painted on the Stars and Stripes, we would rather see
agents pursuing terrorists and their ilk. That would be more productive
than harassing enterprising Americans who are trying to give our country
at least a toehold in a burgeoning industry that promises to get even
bigger, with or without U.S. participation.
To quantify the size of the offshore gaming market, revenue from online
gaming last year exceeded $5 billion, according to published estimates
by Bear, Stearns & Co. More than 70 percent of that money was wagered by
Americans. The General Accounting Office estimates there are in excess
of 1,500 gaming sites in cyberspace.
To suggest that our government's bizarre agenda of obsessing over online
gaming is utterly cuckoo, is a polite way of saying the inmates are
running the asylum. Certainly there is no outcry by the citizenry that
this ludicrous waste of time and effort should be in place.
When Iraq is safe for our GIs, and the anti-American actions of our
adversaries are limited to rhetoric and demonstrations, rather than
horrific violence, that might be a more appropriate time to devote
resources to dealing with relatively lower priority issues.
Our government needs to make a more intelligent and realistic assessment
of its enemies. There are forces in today's world with the motivation
and resources to destroy the U.S. And they ain't bookmakers!
Bah, Humbug. Once again the mainstream press covers a
gambling-oriented story and skews it with such doom and gloom, it might
have been written by Chicken Little.
A story reprinted locally that originated in "The Tennessean" got our
attention with this dire warning: "Online Gamblers Face Addiction Risk."
Without repeating the story's woefully superficial assumptions and
statements, we'll summarize its essence: According to certain critics,
gambling in general, and Internet gaming in particular, is potentially
very damaging to our nation, especially its youth.
Stated one do-gooder who takes exception with point spreads being
printed in newspapers, as well as objecting to gaming in cyberspace: "I
don't think you are printing the price of hookers or crack cocaine
…Maybe papers can at least print a help line too."
Equating gambling with prostitution and drug addiction is a shabby but
standard technique and tells us more about its practitioners and their
agenda than it does about the problems that exist.
Make no mistake, we are not wearing blinders. No thinking person would
deny that gambling poses real risks, both to individuals as well as
society at large. But for arguments sake, let's acknowledge that a
minority of drinkers also experience problems. In fact, addiction to
everything from sex to fatty foods seems to be a problem for some people.
But we don't ban, eradicate or otherwise eliminate a lifestyle choice
simply because a few folks can't handle it.
It would be encouraging to see a gambling story covered by the national
press in an intelligent, balanced fashion. But that is wishful thinking,
since agenda-driven, anti-gaming zealots seem to be the squeaky wheel
that gets the grease.
The Light Touch. With all the acrimonious coverage of college
football's flawed system for determining its national champion, it was
heartening to see one major retailer having some good-natured fun with
it.
Recently, in both the Las Vegas Review-Journal and the Las
Vegas Sun, the full page ad for 99¢ Only Stores included this item.
"99¢ Only Stores will sponsor the 99¢ Only Discount Bowl between #1 USC
and #? LSU."
Athletic directors of both schools were asked to contact Jocelyn at the
Los Angeles-based company ASAP. Unfortunately, it appears this proposal
to sponsor a true national championship contest will not be consummated.
A spokesman for 99¢ Only Stores said they had been advised the game
could not be sanctioned because it would violate NCAA rules.
It may have been only a tongue-in-cheek offer, but 99¢ Only Stores made
a better effort at deciding who's the number one college football team
than the NCAA and BCS combined.
