On the latest example of US authorities’ crackdown on internet gambling, 12 men who helped run a multi-million dollar Costa Rica-based sports betting website were arrested and charged with illegal gambling and money laundering.
The US attorney in the Southern District of New York, which charged the group, said that the websites had gathered millions of dollars a year from hundreds of bookies since at least 2005.
The internet Togel Hongkong gambling operation was run by Carmen “Buddy” Cicalese, who remains at large, the US attorney said. His accomplices included men with a list of colourful pseudonyms, such as Louis “Lou the Shoe” Santos, Marc “Box” Group, and Carl “Sheepshead” Muraco. The case has been handled by the organised crime unit of the US attorney’s office.
The indictment claims the men were collecting fees from sports book-keepers within the US. The bookies would register their clients with the sites for a fee of $15-$30, and gamblers could then placed bets by phone or over the internet, via sites such as betwestsports.com, the indictment said. Sports betting, with a few exceptions such as horse racing, is illegal in the US outside of Nevada.
“If everything is done offshore, there is still a grey area,” said Joe Kelly, a law professor at Buffalo University. “If you are dumb enough to do anything in the United States, you are asking for trouble.”
The war against internet gambling continues…
Signs of a crackdown on online gambling in the US emerged last July with the arrest and indictment of David Carruthers, former chief executive of London-listed Togel Hongkong gambling company Betonsports, which was also based in Costa Rica. Mr Carruthers, who is British, is awaiting trial in Missouri.
Betonsports and other internet gambling companies had hoped that they could circumvent the US laws regarding sports betting by conducting business from offshore. However, US some authorities have taken a different view.
The prosecution of foreign online gambling companies has sparked some international criticism, and the US has been accused of breaking World Trade Organisation rules by singling out foreign businesses.
Since Mr Carruthers arrest, President George Bush has signed into law the Unlawful Internet Gambling Enforcement Act, which stopped credit card companies from processing payments to gambling websites. The law spurred most major internet gambling companies to pull out of the US market, which was by far the largest in the world.
Online casino were given the green light in UK but businesses are still pulling out
The United Kingdom’s new online gambling laws were put in place to regulate the industry and to encourage responsible gaming. Online casinos were given the green light and can now even advertise on television.
But there is still a problem. The number of online casinos and bookmakers taking their business overseas are still increasingly, why? it’s the tax.
As one of his last acts as Chancellor, Gordon Brown decreed that tax on online gambling would be 15%. When a business can relocate to sunny Gibraltar or the Channel Islands where the tax is much lower, the UK hardly presents an attractive option.
Totesport Casino, the online branch of the Tote (the government-owned bookies) is packing up shop and moving to Alderney. It makes simple business sense. Since Alderney, one of the Channel Islands, is on the government’s White List, Totesport will still be allowed to advertise in the UK, but will avoid the costly taxes and stricter regulations.
It doesn’t look good for the government. Brits are huge fans of online casinos and poker, which is why the government chose to regulate, instead of imposing a US-style ban. But it seems they may have been too greedy and so will end up losing out.