Pay Per Head sportsbook services under fire in the United States.
In New Jersey, two years after Operation Heat that led to the arrest of members and associates of the Lucchese crime family that ran a Costa Rica sportsbook, 14 members of the Genovese crime family have been charged for running an illegal gambling and loan sharking operation that used BetEagle.com as its online sportsbook.
While bettors placed their bets online through the web site based in Costa Rica, to collect their winnings or settle their losses they met with members of the organization that acted as agents in New Jersey.
If bettors were unable to pay, their gambling debts were converted into loans with exorbitant interest rates tacked on. Players normally accepted to repay them under the (express or veiled) threat of violence from the Genovese family.
“The acts alleged in this criminal complaint show that traditional organized crime continues to pursue its bread and butter: illegal gambling and loan sharking. The new wrinkle here is the use of off-shore sites and the Internet for processing bets. Law enforcement will use countermeasures that are just as sophisticated to bring these criminal enterprises to justice,” said U.S. Attorney Paul Fishman.
Amongst the countermeasures used by the law enforcement in this investigation, wiretaps proved to be extremely prolific.
The FBI recorded hundreds of phone conversations, but also convinced a number of individuals, including customers of the online sportsbook and sub-agents, to collaborate with the investigation and wear wiretaps when they met with members of the organization to discuss sports betting and repayment of gambling debts.
A player that owed tens of thousands of dollars to a sportsbook agent part of the organization even accepted to introduce an undercover FBI agent, who pretending to be a sports betting enthusiast started placing bets with the illegal bookie.
One of the people indicted, Joseph Graziano, is believed to be the owner of the BetEagle.com website.
In a number of taped conversations, Graziano talks of the opportunity that online sports betting presents to people willing to take some risks, claiming to be making two million dollars per year and to have 50 people on his payroll.
“You’re in the wrong business now, you know? You should be in the sports business… They’re gonna build it up to, like fucking no end,” says Graziano in a recorded conversation.
BetEagle, through a sister site, was offering a “pay per head” service that gave local bookmakers in the United States access to an online system to manage their own bettors in exchange for either a fixed fee per player or a share of their profits.
Local US bookmakers using Costa Rica-based pay per head services were recently indicted in Colorado, Connecticut, Missouri and Texas.
One of Colorado\’s largest sports bookmakers, sentenced in May, used the PPH services of BetJerrys.com, now seized by the US Government but in the past used by New York bookmakers believed to be close to organized crime families.
In Connecticut, 20 people revealed to have links to the Gambino crime family were charged in June for running an illegal bookmaking operation that used the internet and website 44wager.com to take bets.
In Missouri, two men, that in May pleaded guilty to operating an illegal gambling operation on the internet, paid BetEagle an administrative fee of about $20 per week for each player that placed his bets online.
In Texas, it was the IRS that in June announced an investigation into a sports gambling ring that generated $1 billion in bets and $50 million in illegal earnings through offshore sportsbooks in Curacao and Costa Rica.
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