BetOnSports Founder Pleads Guilty To Racketeering 223
Hugh Pickens writes "The founder of Internet- and telephone-based gambling operation BetOnSports has entered guilty pleas to three US charges, including a racketeering charge, and will forfeit $43.7 million to the US government as part of a plea agreement. Beginning in the mid- to late-1990s, Gary Kaplan set up businesses in Antigua and later Costa Rica to provide sports betting services to US residents through web sites and toll-free telephone numbers. Those numbers terminated in Houston or Miami, and were then forwarded to Costa Rica by satellite transmitter or fiber-optic cable. Some of Kaplan's web servers were located in Miami and were remotely controlled from Costa Rica. People became customers by depositing money in a BetOnSports account. By 2004, the BetOnSports organization's principal base of operations in Costa Rica employed about 1,700 people, had nearly one million registered customers and accepted more than 10 million sports bets. Now bankrupt, BetOnSports took in $1.25 billion in 2004, with 98 percent of that revenue coming from bets made through its web site by clients in the United States. 'Gary Kaplan made millions of dollars by making it too easy for people to gamble away their hard-earned money without having to leave their homes,' said FBI agent John Gillies. 'Today's guilty plea should have a lasting effect because Kaplan was not only the founder of BetOnSports, he was also one of the pioneers of illegal online gambling.'"
Who was he hurting? (Score:5, Insightful)
The only one hurt in this operation was the American government who didn't get their cut.
The internet exposes many holes in the law, the most obvious one being locality in this case. What's the difference between driving to the nearby rez for some Pai Gow and going online to bet on the ponies?
Oh noes! (Score:5, Insightful)
I can't be trusted! Protect me, nanny state!
The real reason (Score:5, Insightful)
'Gary Kaplan made millions of dollars by making it too easy for people to gamble away their hard-earned money without having to leave their homes,' said FBI agent John Gillies.
The IRS was pissed it wasn't getting a cut of the action.
Realtors and bankers next? (Score:5, Insightful)
After all, Madoff was operating a Ponzi scheme. This guy told the gamblers the truth about what he was doing, and they gave him money voluntarily.
Re:Who was he hurting? (Score:1, Insightful)
Absolutely. I very rarely bet, but when I do, I'd like to be able to do so using the web (also my preferred way to shop).
The real racketeers here are the US government and the existing betting operations who are trying to protect their cut and business.
What did he do wrong? (Score:3, Insightful)
I'm still not sure what this guy did wrong other than offer a convenient service to gamblers.
His mistake (Score:4, Insightful)
His mistake was not leaving the US when he had enough money to live independently. That or he was too cheap and didn't "donate" to the right legislators.
Re:Who was he hurting? (Score:5, Insightful)
Another classic example why victimless crimes should be abolished. We're told that people over 18 are mature enough to make their own decisions in life.
BTW, do the same agencies raid Las Vegas too, or is only internet gambling the work of the devil?
Victimless crimes? (Score:2, Insightful)
Not really a victimless crime if someone has a gambling addiction. And online gambling doesn't help prevent that lifestyle. But, if it's legalized and regulated, maybe there is hope, but setting limits on how much someone can gamble within a time period. Because, when that person becomes dirt broke, isn't it going to be a burden on our welfare system?
Re:Victimless crimes? (Score:4, Insightful)
Sorry, not buying it.
Show me the PHYSICAL need to gamble. Show me the Gambling DTs. It's not a disease, its a lack of an ability to control yourself.
I'm sick and tired of having options for my behavior limited because some fool can't control themselves. Why should I have a limit put on me on how much I choose to wager because someone else might "have a problem"?
Re:Lasting effect. (Score:5, Insightful)
Yes, they do. As idiotic as it may seem to someone who knows the internet and how it works, they are actually in the delusion that they can stop this. Their idea is that if it's illegal it is not done.
What will happen? Of course, non-US residents will create offshore casinos. People will gamble there. So we'll get laws that make it illegal to gamble in other countries online (IIRC something like that already exists). People will ignore that law, knowing that the chance to be caught is minimal. Government will realize that people gamble abroad and will try to gain access to accounts to see if they get (or send) large amounts of money offshore. To do this, we'll need some sort of excuse. Something will be worked out that makes it necessary to gain access to the accounts of US people. In turn, those offshore companies will offer bank accounts offshore as well and people will put their money there. It's tricky to make it illegal to put money into foreign accounts, but I'm sure we'll see some legislation that makes it illegal to put money into certain countries. Companies will move their banking to other countries.
So what we'll see is the race between companies offering a service and government trying to come up with creative laws that make it illegal to use those services without actually slaughtering the sacred cow of international trade and free commerce. Personally, I'd recommend getting some popcorn and enjoying the show.
Re:Realtors and bankers next? (Score:4, Insightful)
Re:Who was he hurting? (Score:3, Insightful)
Re:Victimless crimes? (Score:2, Insightful)
Show me the PHYSICAL need to gamble.
The physical need are the endorphins and adrenalin that are produced by the body in reaction to the gambling activity. Whether the chemical reaction in your body that you feel you "need" is triggered by ingesting or inhaling substances or by mental stimulation is irrelevant to whether or not something qualifies as an addiction.
Re:Victimless crimes? (Score:5, Insightful)
Wheather a need is physical or psychological really does not matter and it is quite offensive that you would treat them differently.
However as usual the solution is not to ban everybody from doing something because a few cannot control themselves. (which as far as I am concered applies to phsical addiction as much as psychological )
The solution is to support these people and provide help.
Your bias towards only caring about physical addiction and not about psychological shows the problems such people face and shows that until things change there is a need to ban everybody.
Simply put you are your own worst enemy.
Re:Who was he hurting? (Score:3, Insightful)
The only one hurt in this operation was the American government who didn't get their cut.
You know, in theory at least, money that the government collects is meant to be spent on public works and infrastructure that benefit all of the citizens. This has, in the past, included large grants for developing the network infrastructure needed for people to connect to this service. If you don't like the way your government is spending its money then maybe you should organise a new government.
Comment removed (Score:4, Insightful)
Re:The real reason (Score:1, Insightful)
He's spreading a right-wing talking point, debunked here [politifact.com], italics mine:
Section 163 sets out goals for electronic health records. One of the goals is to include features that "enable electronic funds transfers, in order to allow automated reconciliation" between payment and billing. The legislative summary says the intent in the section is "to adopt standards for typical transactions" between insurance companies and health care providers. The legislation generically describes typical electronic banking transactions and does not outline any special access privileges.
Re:Who was he hurting? (Score:4, Insightful)
Can't. My current government took all my money. I don't have enough left to start another one.
Re:Lottery, Stock Market, Gambling--All Sucker Gam (Score:4, Insightful)
Plenty of people enjoy the gambling to the extent that it is worth the losses to them (Personally, my actual gambling is limited to the occasional Mega Millions ticket, but only when the expected value of the ticket goes above the cost, it is fun to fantasize about absurd wealth once in a while).
As far as the stock market, you can actually bet with the house (buy an index fund). The last 10 or 15 years certainly have been miserable, but good investment advice pretty much starts with "don't invest money that you might need short term access to in stocks"; that advice gets roundly ignored (people in their 50's and 60's frequently have huge exposure to equities, when they shouldn't), but that doesn't change the value of the advice for people that follow it, so 10 years of poor market performance is easy to view as an opportunity to buy...
Even Jim Cramer, a guy a lot of people view as a loudmouth tool of the bad guys, starts with advising people to take out insurance against catastrophes (good medical insurance and disability insurance, to protect against illness and loss of income, which are much bigger considerations for retirement than good investment performance) and to conservatively invest their retirement assets (the title of his show "Mad Money" is a reference to money that the particular investor can afford to lose, and thus can take larger risks with).
Pioneers? (Score:5, Insightful)
Kaplan was not only the founder of BetOnSports, he was also one of the pioneers of illegal online gambling.
Gary Kaplan may have been a pioneer of online gambling, but it took the U.S. government to pioneer the wonderful concept of illegal online gambling.
Re:Victimless crimes? (Score:5, Insightful)
We also only allow people to buy a six-pack of beer a week, right?
And only jog 30 minutes a day?
And only eat 1 chocolate bar every 2 days?
And only watch TV for 2 hours a day?
Re:Lottery, Stock Market, Gambling--All Sucker Gam (Score:5, Insightful)
The provide a nice playing table and chairs. They provide nice cards and chips. They provide a dealer who vaguely knows the rules. They provide a public location with security to find people to play with without having to sit in a private location with strangers and large sums of money. They provide an unbiased party for dispute resolution.
And they don't always feel entitled to a percentage of every pot, pay by the hour isn't that uncommon.
Re:Victimless crimes? (Score:3, Insightful)
Wait, how can a firm based in costa-rica rig bets on boxing or horse racing? They can't any more than the "legal" betting venues such as OTB, vegas casinos, etc.
I mean, even if you didn't RTA, the site itself is "betonsports".
Tax evasion...yeah. Gotta love that one. It's nothing like extortion. (sarcasm) Pay us this % of your income or we arrest you.
As for other online gambling - cards and the like, it's not exceptionally difficult to write a monitoring program to count cards and make sure things fall within proper probability parameters. I mean, you actually CAN'T do that in vegas. If you walked in with anything to count cards, measure odds, or even track ... anything on a casino floor you'd be ejected in minutes if not arrested. You have to trust the casino and government monitors. Does a dealer show you each individual card in each deck before they deal blackjack? Are you sure there's 20 aces in 5-deck blackjack? NO. In the end it's all...just a gamble.
Dumb people (Score:2, Insightful)
Gary Kaplan made millions of dollars by making it too easy for people to gamble away their hard-earned money without having to leave their homes
Betting, which allows dumb people to broke themselves, is illegal.
Guns, which allow dumb people to kill others, are still legal.
Re:Victimless crimes? (Score:5, Insightful)
About 20 years ago my house mates and I all forgot to bring a TV set when we started a semester in college. For the first week, we were bitching about "what to do", by the third week, I had taken up racquetball and spent more time studying. By the end of the semester, I had lost weight, was in better shape, and my GPA went up. Each one of my house mates made similar improvements.
Re:Lasting effect. (Score:3, Insightful)
Lemme put it that way, there's a reason why Switzerland and Liechtenstein managed to stay out of WW2, and it was not that they're so terribly full of hard to conquer mountains...
Hey, you gotta leave a place alone to pump your money to, you never know whether you win or lose.
Re:Victimless crimes? (Score:3, Insightful)
"Society" simply refers to all of the actions and choices of individuals. There can be no "we" without the "I". Just because the benefits of social participation are obvious to anyone does not mean that the needs of "society" (which is an abstract concept) trump the needs of the individual (which is a concrete).
Society does not threaten the freedoms of the individual. Other individuals who violate the non-aggression-principle do.
Furthermore, I never claimed, or even implied that addicts were happy. I specifically claimed that psychological addictions are an evasion of personal responsibility. A choice to engage in harmful activity. And that freedom means the ability to make choices concerning your own person. Every single addict knows that he is harming himself. Yet he values his destructive behaviour over the alternatives. There are many possible reasons that he may do so, but none of them impose any sort of duty on other individuals to offer help. I also specifically pointed out that any attempts to offer help are doomed to fail unless requested, because the "addictive" behaviour is a choice. The addict claiming that it isn't (a choice) is a further evasion; a way to escape his personal responsibility.
No one can have a "right" to the productive efforts of others. That is slavery. If you feel that anyone "owes" society anything then you are admitting that every person is a slave to everyone else. I see no evidence of that, and overwhelming evidence to the contrary. The body is only one part of the human. No one can read or control another's thoughts. No one can make decisions for the individual. You even chose the word "influence" in the context of decision making, acknowledging this fact. Coercion may influence my decisions, but ultimately only I can make those decisions. I can choose death over submission to any oppression and for that reason it is a law of nature that I cannot be owned by another individual, let alone "society".
Re:Victimless crimes? (Score:3, Insightful)
You're confusing desires with action.
Free will is almost synonymous with "resisting temptation". Which is why addiction advocates tend to argue so much in favour of the "disease" concept, and why their arguments tend to reduce to the notion that free will is an illusion.
I actually have a mild form of OCD. I'll check to make sure that I have my driver's license before getting in my car and then 10 seconds after leaving the driveway I feel the need to double-check and then triple-check etc. I even do the cliche checking that my front door is locked 20 times every night. But those are desires and whims. I can (and often do) choose to think back on when I first checked to make sure that I had my license and then reassure myself "Garett man, you're being paranoid. You already made sure you had your license. Chill out." Yes, it's all choices. I have the desire to eat a whole cheesecake to myself right now, but I choose not to because I recognize the negative consequences of doing so. Desire vs. action.
Re:Victimless crimes? (Score:4, Insightful)
Solved any other eternal questions with your sample-set of one?
Re:Victimless crimes? (Score:5, Insightful)
The physical need are the endorphins and adrenalin that are produced by the body in reaction to the gambling activity. Whether the chemical reaction in your body that you feel you "need" is triggered by ingesting or inhaling substances or by mental stimulation is irrelevant to whether or not something qualifies as an addiction.
Would you ban chocolate because some people are fat?