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Sportsbook Crackdown in U.S.

Police raided the homes and offices of 36 people in the United States this week, making arrests in connection with an allegedly illegal online gambling scheme, much of which was operated through Costa Rica.

In total, 38 sportsbook agents and bookies were indicted and could face up to 25 years if convicted. Collectively, they took in more than $178 million in wagers over a 32-month period, in an activity U.S. federal officials call “highly illegal” and “criminal.”

Taking a moment to celebrate the end of a 38-month investigation, Florida’s Broward  County Sheriff Al Lamberti said, “This operation proves, once again, that crime has no borders and criminals have no boundaries.

Unregulated, illegal gambling has a negative impact on society and it’s gratifying to know that our deputies and detectives helped build a solid case against these criminals.”

Among those indicted were a New York City firefighter, a sanitation worker and a highway repairman, but arrests were made as far west as Nevada. The companies targeted used the following Web sites:;;;; and

James T. Hayes, Jr., an agent with the United States Immigration and Customs Enforcement Office of Investigations, added his comment to the arrests, saying, “The seizures made by (Immigration and Customs Enforcement) today destroy the backbone of this criminal organization. We remain committed to working with law enforcement at every level to ensure there is no reward, or profit, for those individuals and organizations who seek to engage in systematic criminal activity as a business model.”

As the United States continues to chipaway at an industry it labels illegal, some wonder what the trickle down effect will be in Costa Rica, a destination for sportsbooks, where about 10,000 people are employed in the industry.

Jim Quinn, CEO of the Off Shore Gaming Association, suspects that sportsbooks in the country will continue uninterrupted. Though the indictment targeted at least three Costa Rican companies, most of those arrested were in the United States.

“If the United States wanted to go down there, they could,” he said, “but they haven’t. “I seriously doubt the sportsbooks in Costa Rica are at risk,” he said. And added, “The reach of the U.S. only goes so far.” But the U.S. has had an impact in Costa Rica before.

Since the passage of a controversial law prohibiting the processing of bets for online gaming companies in 2006, at least 20 major sportsbook operations have closed  their doors. The most scarring of these closures was BetOnSports, which shut down its operations after U.S. officials arrested Edinburgh-born executive David Carruthers. The move left 1,200 without jobs.

Even though a World Trade Organization ruling found that the U.S. policy regarding online gambling contradicts the country’s free market access commitments, which include access to betting services, the United States continues to put pressure on the industry on the home front.

The arrests this week represent just one incident in a long line of industry crackdowns. Quinn estimated that half the sportsbooking takes place entirely within the United States. The other half, like in the case of those recently arrested, operates with wire services and offshore call centers.

Opening offices in places like Costa Rica has allowed many online wagering sites to function technically outside of the language of the 2006 U.S. law. By having clients wire their money into offshore bank accounts and feeding the bets from there, they avoid processing bets with U.S. credit cards or bank accounts.

Kevin Ryan, spokesperson for the Queens County District Attorney’s Office, indicated  the individuals indicted on Wednesday were targeted because they also had operations based in the U.S.

“Despite the use of modern technology and an offshore wire room in Costa Rica,” he said, “the defendants are accused of running an old-fashioned bookmaking operation here in the United States.”

While sportsbooks fight one battle in the United States, they are facing other pressures here, as president-elect Laura Chinchilla plans to fund her security initiatives on taxes collected from online gambling outfits.

When she served in the legislative assembly and later as vice president, Laura Chinchilla pushed for more online gambling regulations. When BetOnSports was forced to close, she said the situation had the potential be a catalyst for regulating the industry.

Positing that regulation could stabilize online gambling, Chinchilla said at the time, “I believe we can convince them that regulation is good.” (TT, Aug. 2006).


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