A one-hour CNBC program entitled “The Big Business of Illegal Gambling” aired on Wednesday night, featuring discussion of “illegal” land- and internet-based operations. “The Call” anchor Melissa Francis hosted.
The show began with Francis telling viewers, “The same computer used to connect with work or friends can be used to wager outside the law.” In 2005, when the Chicago White Sox won baseball’s World Series, a man simply named “Vegas Runner” bet $4,000 on 50:1 odds that the team would take down the sport’s most coveted title. He told CNBC cameras, “It’s a gray line. Sports betting is the one topic no one wants to talk about, but everybody does it.”
R.J. Bell, founder of PreGame.com, told CNBC that just 1% of wagering on sports comes from Las Vegas, meaning that the other 99% is purportedly illegal. Meanwhile, a man known solely as “Paul,” whose face was not shown on camera, runs his own online sports betting website in Nevada as part of a conglomerate based in Costa Rica. He revealed that he makes between $80,000 and $100,000 per year and that collecting on bets is the most difficult part of the job.
CNBC’s attention then turned to the Chicago Mob, including Nick Sarillo, whose van was blown up because of illegal gambling, but he survived. Francis narrated, “Illegal gambling is the Mob’s number one moneymaker, the grease that keeps the wheels turning.” Meanwhile, Scott Damiani, the Executive Director of the Outreach Foundation, relayed his tale of excessive gambling, eventually losing his house and business. Upon owing members of a football league $50,000 at the end of 1994, Damiani attempted to drive his car off of a bridge, but hit a guardrail and was unsuccessful.
Attention then turned to Jay Cohen, the first American prosecuted for running an online bookmaking operation under the Wire Act of 1961. From his home in Antigua, Cohen told CNBC cameras, “We didn’t feel we were doing anything illegal. We were not hiding from anyone. We were using our real names and operating in plain daylight.” The site in question, World Sports Exchange, booked more than $200 million in wagers at its peak and received favorable press in publications like the Wall Street Journal and Washington Post.
In 1998, the U.S. Attorney’s Office indicted Cohen, who faced up to five years in prison. Cohen voluntarily traveled to the United States to fight his case, claiming that the Wire Act did not apply to the internet. However, a jury disagreed and he found himself behind bars for 21 months.
Upon passage of the Unlawful Internet Gambling Enforcement Act (UIGEA) in 2006, Antigua lodged a complaint with the World Trade Organization (WTO) alleging unfair gaming practices by the United States. The tiny island nation was successful, but the U.S. ignored the decision. Cohen remarked, “The last administration was so intellectually dishonest about all of this that even when Antigua won, they put out press releases claiming victory.”
Attention then turned to the cheating scandals at the online poker sites Ultimate Bet and Absolute Poker. Todd “Dan Druff” Witteles, who appeared on the CBS news program “60 Minutes” in November of 2008, discussed his encounter with “Graycat” on Absolute Poker: “This was someone who seemed that he had no clue what he was doing. He was playing all the wrong strategy to be able to win.” Then, David Paredes battled “NioNio” on the virtual felts of Ultimate Bet, telling CNBC, “This player was playing a wide variety of hands. It’s so hard to play profitably playing so many hands.”
CNBC claimed that UB.com was “operating in violation of U.S. law” and then the COO of the site’s parent company, Paul Leggett, explained who Russ Hamilton was. Hamilton declined to talk to CNBC despite being fingered as the main person responsible for the multi-million dollar cheating scandal on Ultimate Bet. The now-infamous RawVegas.tv footage of Hamilton leaving a Las Vegas golf course also aired. To date, no one has been prosecuted in either cheating incident.
Finally, two Congressmen took to the airwaves, Jim McDermott (D-WA) and Bob Goodlatte (R-VA). McDermott candidly explained, “Usually, when we talk about putting a tax on people, we get all kinds of [pushback]. They’re saying, ‘Legalize it, please, and tax it.’” Goodlatte, one of the brains behind the UIGEA, evaluated the law: “It certainly hasn’t eliminated all internet gambling by any means, but surveys that I’ve seen indicate that fewer than half as many online gambling operators are offering their services in the U.S. than before this law was passed.”
Recognized in the credits were a variety of industry veterans, including World Series of Poker Media Director Nolan Dalla, Poker Players Alliance Executive Director John Pappas, Sue Schneider, and iGamingNews.com.