State Lotteries May Suffer Due to Online Poker Bill

The Americans love their online casinos and the possibility of legalization has had US players paying close attention to gambling news. Recent news articles say that legalization of online poker could hurt the state lotteries.

There was a great new article post on a site called NoDepositCasinoOnline.com:

Republican Representative Joe Barton from Texas introduced a bill last year called the Internet Gambling Prohibition, Poker Consumer Protection, and Strengthening UIGEA Act of 2011. State governors from around the country are now expressing their opposition to the bill saying that it will hurt the revenue stream of state lotteries. This would not only hurt the states’ budgets but it would also be a serious blow to the lottery-funded scholarships.

In Tennessee, the HOPE Scholarship is funded by the state lottery. Shirley Raines, the President of the University of Memphis explains that many students from socioeconomic backgrounds that normally could not afford university tuition are able to attend U of M thanks to these lottery funded scholarships. She fears that online gambling will cause a decline in state lottery revenues and dry up the funding for the scholarships.

Steven Cohen, representing Tennessee’s 9th district in the House, disagrees with Raines’s assumption that online casino games would affect lottery revenues. Having cosponsored the bill with Representative Barton, Cohen explains that lotteries and online casinos cater to different crowds. He said that if online gambling were to be legalized, he hopes that the Tennessee General Assembly uses some of the tax revenue toward the scholarship fund.

Barton’s bill is unique in that it does not legalize online gambling on a nationwide level; rather, it enables states to legalize and regulate online gambling locally. It facilitates the creation of USA online casinos on the state level. Online casino reviews are excited about Barton’s bill. Some say it is the perfect answer to the 2006 UIGE Act, because it does not contradict or erase the original act – it clarifies, defines, and channels it.

As scholarships and educational funding are extremely important, I have to wonder if this sways players’ opinions on online gambling. Scratch Lottery Tickets and watching the draw on television has been a huge part of many of our lives. Would you be sad to see it go in exchange for the right to gamble online?

Bodog’s Costa Rican Service Provider Closed

Fear of association have with the Bodog.com indictments all over the gambling news circuit have prompted the closure of their service provider’s office in Costa Rica. Calvin Ayre, founder of Bodog, announced that the office had closed in a statement on his website.

"A Costa Rican based business process outsourcing company (BPO) providing services to the Bodog Brand has expedited its closure after fears it will be wrongly associated with the Bodog.com Indictments. After the brand licensing agreement with the Bodog Brand and Morris Mohawk Gaming was terminated in December 2011, along with ever increasingly restrictive economic conditions in Costa Rica, the BPO had already started to make plans to wind down its operations.”

"The plan was for a gradual shut down of operations to minimize disruptions to their staff. But the closure was expedited after its management feared the mainstream media reporting of the indictments could result in the BPO wrongly being caught up in the proceedings.”

"The false claim that Bodog was employing hundreds of employees in Costa Rica comes from a misinformed view of international business," and "the company named in the indictment, Bodog Entertainment Group S.A. was only a domain management company. The Bodog Brand granted it use of the Bodog name to make it easier for the management company to go after trademark infringements under existing US trademarks. It never operated a gaming business in the US or otherwise. The company shut down in 2008 in a restructuring move after Scott Lewis of 1st Technology attacked Bodog.com, successfully stealing the domain. All of the domains the company managed were moved to a non-Costa Rican based management company."

Media reports have indicated that the BPO employees were not given proper warning of the closure and showed up for work only to find it locked. 

The DOJ Strikes at Bodog

The United States Department of Justice (DOJ) strikes again but this time it’s Bodog under scrutiny. This has taken the world of gambling news by storm. Here are the details from CBSNews.com.

(CBS/AP) BALTIMORE - The gambling website Bodog.com was shut down, and its founder Calvin Ayre was indicted, for illegal gambling that generated more than $100 million in winnings, federal prosecutors said Tuesday.

The website's domain name was seized Monday and the indictments of four people, all Canadians, were unveiled Tuesday in Baltimore.

Gamblers in Maryland and elsewhere were sent at least $100 million by wire and check from 2005 to 2012, the U.S. Attorney's office said, adding that Bodog conducted a $42 million advertising campaign between 2005 and 2008 to attract gamblers to the website.

The operation allegedly moved funds from Bodog's accounts located in Switzerland, England, Malta, Canada and elsewhere to pay winnings to gamblers. The accused each face up to five years in prison for conducting an illegal gambling business and 20 years for money laundering. Bodog.com faces a fine of up to $500,000 for gambling and money laundering.

The indictments follow federal prosecutions last year of three of the biggest websites involved in online poker. More than 75 company bank accounts in 14 countries have been frozen, and authorities are seeking $3 billion in fines and restitution, in that investigation.

In addition to the 50-year-old Ayre, prosecutors say the indictment of Bodog names website operators James Philip, David Ferguson and Derrick Maloney. A U.S. Attorney's Office spokeswoman said arrest warrants had been issued for the four.

Ayre posted a statement on his website, CalvinAyre.com, saying that his company did not take U.S. bets.

"Bodog UK, Bodog Europe and Bodog Asia have never taken bets from the US," the statement said. "The Bodog Brand is currently consulting with its legal advisers with a view to having the domain returned."

Ayre also wrote, "I see this as abuse of the US criminal justice system for the commercial gain of large US corporations. It is clear that the online gaming industry is legal under international law and in the case of these documents is it also clear that the rule of law was not allowed to slow down a rush to try to win the war of public opinion."

An affidavit filed along with the warrant to seize the site said investigators created accounts with Maryland addresses and received checks in the mail for winnings. The affidavit also said investigators interviewed a former Bodog employee who named top officers and directors and said the company had hundreds of employees in Canada and Costa Rica handling day-to-day operations.

"Sports betting is illegal in Maryland, and federal law prohibits bookmakers from flouting that law simply because they are located outside the country," said U.S. Attorney Rod J. Rosenstein. "Many of the harms that underlie gambling prohibitions are exacerbated when the enterprises operate over the internet without regulation," Rosenstein added.

At first, the interesting aspect was that they attacked a .com domain that has been inactive for a while. Now it all makes sense. I’ve read quite a bit about this issue on gambling forums. Many people believe that this was a long time coming and that Ayre has dangled his brand and operations in the face of the US government. I tend to believe that this opinion is well founded. Would you agree and do you have sympathy?