2nd March 2012

A six-page indictment was filed on Tuesday by Rod Rosenstein, a US Attorney for the district of Maryland, accusing Mr. Calvin Ayre of “knowingly and unlawfully” operating an “illegal gambling business involving online sports betting” from June 2005 to January 2012 in violation of Maryland law (in particular the federal Illegal Gambling Business Act ‘IGBA’) and conspiring to commit money laundering. Hence the two separate charges include conducting an illegal gambling business and money laundering conspiracy.  His co-workers James Philip, David Ferguson and Derrick Maloney have also been indicted, as has the Bodog Entertainment Group. The indictment focuses on the movement of funds from accounts outside the U.S., in Switzerland, England, Malta, and Canada, and the hiring of media resellers and advertisers to promote Internet gambling.

According to the indictment, Bodog founder Calvin Ayrepotentially faces a maximum 25 years in prison for alleged violations of U.S. gambling and anti-money laundering laws.  The indictment illustrates how Ayre worked with James Philip, David Ferguson and Derrick Maloney to supervise the business and focuses on their alleged actions to promote the Bodog.com online betting service to customers in Maryland.  In addition to the movement of funds from accounts outside the U.S., the parties are also alleged to have instructed third-party payment processors to pay out more than $100m in winnings to U.S. customers.  U.S. authorities have confirmed that they have taken action to seize the Bodog.com domain name via a warrant presented to registrar VeriSign in Virginia. It seems that this has become a standard tactic of U.S. internet gambling enforcement, following similar action taken against Full Tilt Poker, PokerStars and Absolute Poker last year.  Attorney Rosenstein commented that “Sports betting is illegal in Maryland, and federal law prohibits bookmakers from flouting the law simply because they are located outside the country.  Many of the harms that underlie gambling prohibitions are exacerbated when the enterprises operate over the Internet without regulation.”

 

We have not seen a copy of the indictment but it will be interesting to see whether the prosecutors can show a link between Mr. Ayre and Bodog’s ongoing activities as well as that the provision of poker to Maryland citizens actively violates the IGBA.

 

For more information please contact james.scicluna@whpartners.eu