Brooklyn DA Busts a Billion Dollar Illegal Sports Betting Ring in Costa Rica
Brooklyn District Attorney Ken Thompson announced on June 30 that his office had busted an illegal gambling ring worth almost a billion dollars. The Brooklyn DA unsealed a 57-count indictment involving 4 alleged illegal gambling operators.
Four men are accused of running a sports betting ring involving $927 million in wagers on NFL football games. The men’s online operation was based on servers in San Jose, Costa Rica.
Ken Thompson’s Investigation
According to Ken Thompson, the ringleader of the operation is 58-year-old Gordon Mitchnick of Crestline, California. The indictment states that Mitchnick ran a service center in Costa Rica which was fully staffed for a billion-dollar betting ring. The Costa Rican operations are thought to have cost Mitchnick $200,000 a month.
In his press conference, the district attorney underscored the immense scope of the gambling operation.
Thompson said, “This huge gambling operation, possibly the biggest one ever to be dismantled by a local prosecutor’s office, allegedly moved millions of dollars around the United States and the world.”
Why Illegal Sports Betting Is Bad
Ken Thompson also noted that illegal gambling rings like the Mitchnick operation needed to be stopped. He told the reporters, “Illegal gambling is not a victimless crime, it preys on peoples’ vulnerabilities and directly leads to money laundering, loansharking and a host of other crimes.”
The operation used password-protected websites, TheWagerSpot.com and WagerABC.com, which offered wagering opportunities and betting lines. The websites also had toll-free hotlines, so gamblers could call on a phone to post bets.
Mr. Thompson named Mitchnick’s alleged accomplices. Two of the men lived in California: 43-year old Claude Ferguson and 39-year old Joseph Schneider. A third alleged accomplice, 66-year-old Arthur Rossi, was described as living on the east coast. According to the district attorney, Arthur Rossi handled east coast operations.
Though this is the largest online sports betting operation stopped by a local DA, it is by no means the largest illegal betting ring ever busted. Hundreds of billions of dollars are wagered illegally each year in the United States alone, despite a 24-year ban on sports betting under the Professional and Amateur Sports Protection Act (PASPA).
American Sports Betting
Gaming industry analysts believe that the United States is moving towards legalization of sports betting at the federal level. The last generation has seen a proliferation of gambling, whether through lottery betting, tribal casinos, online gambling, and mobile gaming. Americans are more comfortable with gambling than they were a generation ago.
Thus, many argue that the regulation of sports betting is the best way to end illegal sports betting rings. Bans do not work, as evidenced by the fact that 4 men can build a billion-dollar sports gambling operation. Driving the practice underground leaves problem gamblers at the mercy of criminals.
Legalization and regulation of sports betting would allow standards to be upheld. Licensed operators would have to uphold fair standards, while providing hotlines and other resources for problem gamblers. Also, states tax licensed gaming operations, so it is a way to fund government without raising taxes on citizens.
Mayor Council Discusses the PASPA
The United States Conference of Mayors’ (USCM) 84th Annual Meeting which commenced in Indianaopolis this week tabled a discussion of sports betting. The USCM, which represents over 1400 communities in the United States, recommended ending the PASPA law, which would make gambling legal at the federal level in all 50 states (instead of 4 states, under the PASPA).
State bans on sports betting would remain in place, while state lawmakers could choose to ban gambling, if they saw fit. States which preferred to legalize sportsbooks either online or offline could do so, while collecting taxes on each.
USCM Endorses Legal Sports Betting
The USCM statement on sports gambling read: “The American Gaming Association estimates that in 2015 alone, Americans placed nearly $149 billion in illegal sports bets. Current law is out of step with public attitudes, as the vast majority of football fans, 65 percent, say legal, regulated betting will protect the integrity of the games or have no impact on outcomes.”
Continuing, the USCM said that it endorsed an end of the PASPA, saying, “The United States Conference of Mayors and the nation’s Mayors, believe it’s time for a new approach to sports betting in the United States that could include strict regulation, rigorous consumer protections, taxation of revenues to benefit local communities, and robust tools and resources for law enforcement to root out illegal sports betting.“