The Offshore Game of Online Sports Betting

Oct 26, 2015 · 99 comments
timoty (Finland)
It is so silly: it's perfectly legal - and perhaps even desirable - to bet on stocks and other similar stuff, but it's illegal to bet on sports.

Make it legal, licensed and regulated.
ejzim (21620)
Addictive personalities will find some way to get their fix, legal or illegal. We seem to have won most of the battles with cigarettes, without making them illegal. Maybe there's a way to make gamblers reach a point where they voluntarily give it up, using PR and taxes.
Nina (Chicago)
Contrary to what most people think online forms of gambling generate far fewer jobs than brick-and-mortar casinos do since a great deal of the action is handled by software. On balance, they probably lead to a net loss of jobs since they cannibalize casinos market share (gambling has been a decreasing share of Vegas casino revenues for about a decade). As a result, a lot of low-paid service jobs that constitute work of last resort for low-skilled individuals are being replaced by off-shore software engineers (sounds familiar?)
I've seen online gambling destroy an erstwhile friend's life and I would feel much happier if it were at least legally restricted in any to select brick-and-mortar locations around the country rather than made available to impulsive young adults, 95% of whom will lose all their money at it--this notwithstanding the comments here from DFS fans who want their hobby to be more accessible.
John Ho (Las Vegas, NV)
The only useful thing about these investigations is it keeps reporters and prosecutors employed. Though maybe their talents would be better spent investigating other things.
Tony (NYC)
Yes, and we should legalize hard drugs too and tax them. While we're at it, prostitution too. Lets have a nation where anything is legal as long as it's taxed.
pjt (Delmar, NY)
It's OK to go to casinos to gamble, it's OK to go to Nevada to gamble (on sports too), it's OK to go to racetracks to gamble, it's OK to gamble on as many lottery tickets as you want to buy, it's OK to gamble on smoking (gambling with your life), it's OK to place money on (gamble on, let's face it, that's exactly why people do it) on fantasy teams. It's OK to gamble on politicians, it's how the uber wealthy maintain the Carried Interest provision of the tax code. Legalize it through tightly controlled public benefit corporations. The NYRA would be a good choice given their track record (couldn't resist throwing in some cynicism).
Brian butler (North)
All that money spent on the investigations and they end up charging people with misdemeanors and giving them probation, then the bettors and the books simply switch to new people to conduct business. What a waste of time and effort, just to keep people from betting $50 or $100 on a football game.
eau4a (CA)
Thank you for the referral. I went to the link, enjoyed the morning puzzling it all out, and now - win or lose - I have something tangible to follow. It certainly beats all the deferred gratification of tracking presidential hopefuls.
Sneakersteve (Bronx, NY)
They us gave up on Liqueur years ago. And Marijuana is pretty close to being legalized. So why would we be spending millions of dollars fighting this "war"? We already have gaming casino's everywhere. So if people want to gamble there hard earned money, let them do it legally. It certainly could create service jobs and tax revenue.
Tim Hendley. (NJ)
America has to stop being so childish in its attitude towards online gaming ... or is it because the USA does not control it and therefore it "cannot be a good thing"?
Blew beard (Houston)
This is why I'm thankful the NY Times has the resources to fund in depth articles like this.

Jerry Jones should be kicked out of the NFL for his financial participation in this
fantasy football
This should cause the NFL to have many sleepness nights since it really is

dangerous to the game
[email protected] (Las Vegas NV)
The article describes the way we are with the business of sports transactions. My book MAY THE ODDS BE WITH US: LEGAL SEGREGATION IN AMERICA describes why we are the way we are with the the business of sports transactions.
The alliance of corporate sports monopolies and their political representatives are responsible for a situation that has created legal segregation in America.
My pro lawsuit will challenge this legal segregation. Hopefully all Americans will be free be free to do what only people in Nevada are free to do.
hal9000 (Orlando)
If it can't be regulated when it's illegal, what makes you think simply making it legal will make it easier to regulate?
Paul E. (East Rockaway, NY)
Take a look at Nevada. Well regulated, taxed industry. As a result Nevada has no state income tax. It's funded by taxes on the gambling industry and corporate taxes.
David Whittington (Utah)
hal9000 my boy: Legal online sports betting in the USA could be regulated the SAME way legal sports betting is regulated in Nevada and Great Britain - two places with a SANE approach to sports betting. Online sports betting involves credit cards and IP addresses - a FULL audit trail for all tranactions. Legal regulated online sports betting in the USA would bring in BILLIONS in tax revenues for the US Treasury. Sports betting is already rampant all across the USA and cannot be stopped. The SANE approach here is to bring sports betting out of the shadows and tax the industry and regulate the sports betting industry !! NBA Commissioner Adam Silver has already stated he SUPPORTS fully legalized online sports betting all across the USA. Adam is CORRECT ! Online sports betting MUST be legalized !!
Paul E. (East Rockaway, NY)
The attitude of US politicians towards online gambling is infantile and hypocritical. Want to empty you bank account and play the lotteries or buy thousands of scratch off tickets at the corner store? No problem says NYS. BTW the state is one of the biggest hucksters by selling those scratch off tickets at astronomical odds where the players really IS throwing their money away with very little chance of winning anything at all. Walk into any stationary store and those scratchers are staring you right in the face, luring you with big prizes. Want to take your life savings and bet on horses? No problem, you can even set up an online account with OTB!! Want to play online poker? NO NO NO that's evil incarnate says NYS. Bet on sports? NO! What hypocrites. Gambling parlors have been legal in England for decades, the state regulates them, taxes them for much needed revenue. The nanny state here thinks they know whats good for you, only because they haven't figured out how to make a buck off of it yet.
Scott (<br/>)
Unless the United States is going to get into the content filtering game, like the Great Firewall of China, there is no way to technically block anyone from visiting any website on the Internet that is open to traffic. Even if you were to try content filtering, there are ways around them including virtual private network (VPN) technologies that will route my communications anywhere in the world making it look like I am elsewhere.

Otherwise, users have little control over how their requests are routed on the Internet. The routers, the devices managing traffic on the Internet, look for the best route to the destination. Thus, if the network communications comes from the United States, routing will occur in the United States regardless of your intentions. There are ways to force routing of network traffic using a specific path but doing so is something that an elite hacker can do and not something for the novice.

These companies would not exist if there were no customers that wanted their services. We should stop trying to legislate this and wasting the resources trying to control human behavior. As a society, we already have accepted gambling (lotteries, horse racing, casino gambling, and now fantasy sports), why not just make it so people can do it legally with consumer protection from nefarious operators and the ability to tax whomever collects the money.
Barbara (Virginia)
It seems to me that we should make it legal or not. I used to work a lottery machine, way before I had any political views on the subject, and I learned from that experience that for most people, it was just a little event in their life with varying degrees of upside potential, like eating out once a week, or maybe getting a surprise visit or call from a friend. These people used the proceeds (if they won) to do something they wanted or needed, depending on how much they won, but would otherwise just keep dropping a few dollars a day. No worse than a cigarette habit, even then, or a latte habit today. And then, there were people who, when they won anything, upped the amount that they bet until eventually, they lost what they had originally won. And I suppose (though I didn't know it at the time) some of the latter actually borrowed money to keep things going. This was 1979, and it was all cash, so no one could run up big credit card bills -- more likely, they dealt with loan sharks. The point is, even if internet gambling makes it easier to become an addict, it's only a matter of degree, and the land-based casinos make it easy enough. It would be better to legalize it and impose consumer protections, like making gambling debts 100% extinguishable in bankruptcy (which would require casino operators to think long and hard about "loaning money" to the people using their services).
Charles (<br/>)
Phenomenal reporting. As an interesting aside, I bet (heh) Tim Berners-Lee never thought that he'd be mentioned in an article on illicit gambling. The use of the internet certainly enables many more pathways over which to conduct the gambling business.

Maybe this activity should be legalized. It looks like an electronic drug trafficking scheme, and instead of tunnels between Mexico and the US, we have numerous, diaphanous internet connections. And despite our effort to curb the business, there are millions of customers that make it a lucrative business, as this intriguing article states:

"But with so many Americans eager to bet on sports, Pinnacle must have realized it could not abandon such a lucrative market — a fact that did not escape the Queens prosecutor."

In drug trafficking those tunnels are met to be obscured. In the off-shore betting industry, the goal is to obscure the connections between customers and betting establishments. The obscurity is what confounds law enforcement. Were we to legalize this betting, it would make its trafficking mechanisms transparent as well as provide citizens with tax revenue.

This article shows how difficult it is to thwart an illegal activity with an enormous customer base that is made possible through internet technology. Perhaps it's time to look at controlling off-shore betting by allowing it on-shore where it can be in the open and regulated.
Mary (Atlanta, GA)
Seems every day I read articles where the NYTimes and readers want to decriminalize everything, including the criminals. The only people that you want in jail are anyone working on wall street, and some doctors and lawyers. Hmmm.

If we legalize gambling, and tax the casinos on their winnings, I wonder how much they will actually report. Every action has unintended consequences, but the NYTimes and readers seem oblivious.

Gambling can be fun, but for the most part is also dangerous for some - mostly for those that can ill afford to lose. Will the media be crying in a few years that legalized gambling is taking advantage of the poor, of minorities? And how unfair that is?

And if it's unfair, then will we start giving the poor money from tax payers so that they too can gamble? Kind of like we did when telephones weren't fair and we gave away cell phones to sell on eBay?

Casinos are a dangerous enticement for some, gambling is not good for people without disposable income. That means it isn't good for most Americans. If we can agree that it is the individual's responsibility to pay their gambling debts and they will NOT be written off or paid by the tax payer, fine. Otherwise, do your job and close down illegal gambling.

Or are we at the place in time now where if it's too hard for the government to implement their own laws, we just get rid of the laws?
GLC (USA)
Now that the New York Times has exposed the ugly gut of online sports betting, it can bop down the road a few blocks to Wall Street and drop the drawers on the biggest shysters in the Universe.

I imagine my fantasy expose is a long shot. Really long.
J. Ice (Columbus, OH)
The various state governments would prefer that you spend your gambling dollars on the lotteries. Like that isn't the worst form of gambling.
gm (green valley, az)
If I were a lobbyist for U.S. gambling interests, I would be promoting these vigorous enforcement attempts. This looks a lot like protectionism and abridgement of competition.
Brunella (Brooklyn)
Imagine the infrastructure projects, education and social programs for citizens which could be realized by heavily fining and taxing these illegal online sports entities. They've taken their cue from corporations and individuals gaming the system by hiding trillions of undeclared, untaxed income offshore, or in the case of many large companies—paying little in taxes due to subsidies and tax breaks from the government. It's time for all of them to pay up. End corporate welfare. Find them, tax them.
charles c. (Astoria)
IT's time to legalize sports gambling in the United States.
justin sayin (Chi-Town)
Thousands of jobs are in jeopardy in the gambling industry and government restrictions should not hinder the industry. The gambler has the free will to make the decision to win or lose. He or she knows the odds and the moral repercussions of their decisions .
Ruben Kincaid (Brooklyn)
The House always wins.
Jack (Rutherford, NJ)
The biggest gambling market in the world includes the NYSE, NASDAQ, futures and commodities trading, the bond markets etc. Anytime someone takes a "position" on the future value of a stock, bond, option etc that person is essentially gambling. As noted in Michael Lewis' Liar Poker, gambling is a huge part of the "Wall Street Culture."

I can argue that for the average person who has the option of buying a stock or bet on an NFL game, that person would be better betting the NFL game. The data and information to make an "educated" speculation/bet is clearer. They know the players, coaches, other teams, potential weather conditions etc. They don't have to read opaque SEC filings and deal with "off balance sheet" descriptions of activities. Or guess if the CEO is an effective leader.

It is time that we look to legalize gambling like what has been done in Europe. In Europe, we have regulated companies some of which are publicly traded. Bookmaking is seen as a profession like accounting. Transactions are monitored. Taxes are paid. And problem gamblers are not dealing with mobsters and other unseemly types.

Although I think gambling is a bad idea and, too often, results in addition and damage to the gambler and his/her family, it is time to bring it out of the shadows. Let's acknowledge that it's no different than other forms of speculation. Or we should outlaw all speculation ... but that argument is for another time.
Excelsam (Richmond, VA)
You can sure see who has influence in the U.S., when it's NO PROBLEM for Fantasy sports gambling, NOW with the NFL having a share in it, while paying no federal taxes, and others being hounded constantly by all U.S. legal services. Hey, DOJ, ever heard of a conflict of interest? Now that the NFL is getting additional payoff, don't you think game fixing is in order? Or are you totally naive?
Markangelo (USA)
Funny all my sports friends think it is Wall Street that is rigged ?
Dave K (Cleveland, OH)
My basic opposition to gambling: Any attempts to get money for nothing are going to end badly for the person attempting to do so.

However, making it illegal clearly isn't preventing people from gambling. So we would do a lot better putting the money we currently spend on enforcement into treatment of gambling addiction and education about how gambling actually works out. That kind of public education campaign and tax worked for tobacco, and could work for gambling (and currently-illegal drugs, too).
Sertorius (Charlotte, NC)
This is a well-reported and well-written piece, but my reaction mainly a shrug.

I just can't get all that upset that people who want to place bets on sports are able to do so.
ZcodeSportSystem.com (PA)
Might as well legalize it and tax it heavily.
Tom (Evanston, IL)
The laws making gambling or selling gambling services illegal are immoral. The bad laws should go away. If you want to help addicts, spend your own money and time and work on educating people. It's immoral to deprive other people the fun and their jobs.
TyroneShoelaces (Hillsboro, Oregon)
In order for these enterprises to prosper, more people have to lose than win. And, guess what? Over time, there's about a 95% chance you will be a loser. Here's my four step time-saving suggestion. 1) Pick a street corner. 2) Stand on it. 3) Hand a dollar bill to everyone who passes by. 4) Rinse, repeat.
Ken C (MA)
Yes, our response as a nation is to spend billions of dollars trying to hide the temptation, make it difficult, and scare people away from it. "Protect me because I cannot control myself nor can my Church".
Wilson (New York)
But where is teh fun in that. It's a vice. Vices cost money. Alcohol, drugs and tobacco aren't free either. Yes, sports gambling has cost me money but I can't imagine the boredom I would feel without it. Compared to some other vices, that cost money and your life, this one can be relatively harmless, if you keep it in control.
Dan Stewart (Miami)
All entertainment comes at a cost. What's the difference between losing $5,000 a year playing poker and spending $5,000 a year going to NFL games?
JD (Florida)
The 2006 law was supported by the evangelicals on the right and the nanny state on the left. Not surprisingly, the result is inconsistent and incoherent.

So fantasy sports are games of skill, which makes them legal. Sports betting, on the same events on which fantasy games are played, are illegal. Online poker, the ultimate game of skill, is illegal, but utterly brainless lotteries, scratch tickets and keno are legal. These games that require absolutely nothing more than a pulse to play are legal, and best of all, (state) governments are the bookies!!

Can't make this stuff up.

So who is lobbying against changing these laws to make them sensible? Start with the public employee unions who benefit significantly from the funding received by the states from lotteries et al and see sports betting as a threat to that revenue stream. Especially, the police unions for whom these laws are the equivalent of a full employment act. Toss in the casino and race track operators, the holy rollers and the crowd that thinks its ok to tell you what you can do and when you can do it and there you have it.

What a joke.
Lynn (Chicago, IL)
You summed it up perfectly. Nothing for me to add but kudos.
Rex Stock (Reno, NV)
The people who run companies like FanDuel and DraftKings want you to believe winners are determined by skill--they are not.

HIghly knowledgeable players can make highly informed decisions and still lose on a regular basis. All those commercials that show big winners represent a tiny percentage of players who throw money at this con.

Online poker is NOT the "ultimate game of skill"; the casino industry would never have devices on their floors (I have over 30 years in the legal gambling business) unless we were assured that a reliable and verifiable amount of money could be guaranteed over the course of time.

There is nobody, repeat nobody, who can beat a video poker machine on a regular basis if that machine is a legal gambling device. All programs are tested, verified, and running a legal device ensures we maintain our gambling licenses.

This is NOT a conspiracy to fund police unions or public employees who receive very little (if any) funds from lotteries. Anyone who thinks that Fantasy Sports offers a superior betting proposition to Lotteries needs to stop thinking conspiracy and start looking at the real numbers.

The true cost of Fantasy Sports is born by society--families whose hard-earned money is wasted on a sucker's bet. And now, we are making that bet as easy as downloading a freaking app.

My colleagues in casino gaming look to find younger players and this has blinded them/us to the true cost of Fantasy Sports and the legal gambling business.
JD (Florida)
Gambling machines are rigged for the house, no question about it. Whether its video poker, slots, whatever. So are table games like black jack and roulette. If you play these games long enough you will lose money. Online and live casinos take a percentage of the pot in a real poker game, but they have no interest in who wins or loses each hand. Poker (e.g., Texas Hold em), where players compete against each other instead of the house, is very much a game of skill. Obviously there is an element of luck involved but that is true of everything - balls take funny bounces, weather unfairly biases one team's chances of winning vs. another's, etc.

I used to live in Massachusetts where the proceeds from the lottery go directly to fund local aid to cities and towns. When local aid is decreased, cops and teachers lose jobs. Add to that the time cops currently spend policing illegal gambling operations and there is no question they are very interested in keeping the status quo.
Dan (Sandy, UT)
Our lawmakers have allowed, if not encouraged legal loan-sharking (pay day lending) which preys on those who can least afford the usurious interest rates. I don't believe on-line sports betting is any more damaging than the loan sharks.
jacrane (Davison, Mi.)
Somehow or other I knew that all of the NYT's picks would be that it should be legalized and TAXED. Of course the gov't. must TAX everything. That is it's job.
Disgusted (New Jersey)
The answer to this is simple. legalize sports wagering nationwide. This would deprive the Mob and others so criminally inclined of billions of dollars. It amazes me that America continues to engage in this charade, where by not having legalized betting on college sports we protect the integrity of the sport. This is utter tripe. Legalize it; control it; let the casino based companies run it. This simply makes much more sense then letting mobsters et al reap hundreds of millions of dollars.
Common Sense (New York City)
You can bet on horses legally. You can go to an Indian reservation and play poker and slots til you're bleary-eyed. You can put money into the stock market. And you can load up on mutual funds and have absolutely no idea what fees and expenses the fund manager is taking out before proclaiming your gain or loss. Most of our legal financial life is a gamble. Add sports to the list. Make it legal. Collect fees and taxes, and you don't have to waste law enforcement's time scurrying after a bunch of toupee wearing, polyester-suited low-level thugs. In turn, those organizations will be transformed into productive, tax-paying enterprises that won't need to go through crazy artificial machinations to avoid detection. Their leaders won't have to hide behind aliases. And we won't have to read meaningless articles like this -- an entire series??!!
Matt (NJ)
So the real problem is gambling is bad, except when the government profits off of it. A little like illegal drugs are bad, but Oxycondone is good because it's taxed. Meanwhile prescription drug abuse is the leading cause addiction in the US but we have to bust people with a joint and lock them away.

If the goverment were really worried about gambling addiction, why all the lotteries and casinos.

Another instance of do as we say, not as we do.
CHN (Boston)
With all of our tax money the feckless characters in Congress waste, why don't they do something effective about this? For one thing, the surge in fantasy betting sites is encourage an entire generation of college student-age people to acquire a good, solid gambling habit.
Jerry Sturdivant (Las Vegas, NV)
Good for the New York Times and good on Frontline. But you ignored online Poker. Gambling is pervasive across the country. From lotteries to horse racing to the subject of your article. So why can't I get back to playing poker, worldwide, on line? Why has Las Vegas casino owner Sheldon Adelson been able, with the help of the Republican politicians he donates to, been able to prevent nationwide online poker? Why was online poker left out of your article?
richopp (FL)
All sports are based on gambling and pretty much have been for the past 50 years or so. Our political world in the US is now a sporting event with odds, polls, and huge wagering. (Who will give what candidate a billion to buy the election? We don't know yet, but we will soon!) Those who bet, bet on EVERYTHING. Sports betting has been responsible for massive cheating over the years and that will never change. As the old adage says, "follow the money."

My personal belief over the past 25 or 30 years or so has been that gamblers run the sports world and probably always have. Evidently playing a sport is simply a way to help or hurt gamblers these days. I have nothing against gambling except when it results in cheating. We should let gamblers gamble and have them pay taxes on their winnings. If I win the lottery, I only get a portion of the money as the various governments take the taxes out before I get the cash. Why not do the same with gambling? If you win a million, you get that less x% (whatever people who make a million pay in taxes) and you can file for a refund if you can prove you lost the money betting on something else.
Collecting taxes is what we do best here, so let's do the right thing and legalize gambling and tax it. People who are addicted and lose the rent are no different from those who drink or drug it away. But this is a vice we need since it produces huge amounts of cash for those who buy elections and control the US. Go for it!
Thomas (Singapore)
I don't see the big issue here, people like to bet despite the fact that it is illegal in many places around the world.
One might speculate that gambling is the reason for many personal, social and financial problems but all these considerations will not even start to keep people from betting.

So you can either legalize it and charges tremendous amounts of taxes on it, have the state participate on the idiot's tax of betting, or you can make it harder to access.

For the latter, simply issue a law that makes it illegal for credit cards to be charged for this kind of business as such laws already make it illegal for a number of types of businesses.
And as online gambling cnnot be paid for by cash, the clients will become less interested.
At east those that will find other, more expensive ways to pay for their gambling by e.g. Bitcoins.

But as you cannot stop it, you better have the state get it's share.
Worked with other addictions like Marijuana so it will work here too.

If there is a will there is a way, so why not tax it.
Dan Stewart (Miami)
Just what the US needs, more people in prison.

The US already has the world’s highest incarceration rate —more than five times that of any Western nation and higher than the worst police state. The US also has the world’s largest prison population —with a quarter of totalitarian China’s population, the US has almost twice as many people in prison.

But, never satisfied or content to rest on its laurels, the US is constantly finding innovative ways of creating new classes of criminals. Not that imprisoning people who make or take bets is anything new. But, now we have victimless-crime crusaders casting their ever-widening prosecution net to include content delivery networks as co-conspirators in illegal online gambling. Maybe the phone company or internet provider is next.

Eminent attorney and civil libertarian Harvey Silverglate wrote an book titled, “Three Felonies a Day: How the Feds Target the Innocent,” that goes to the heart of the problem. Whether they know it or not, everyone in the US is a criminal. There are so many criminal laws (combined with the evisceration of requirement of criminal intent, mens rea) it is nearly impossible to live a normal life in the US without constantly violating the laws of the land.
Simon (Boston)
In reading the comments it seems clear that the vast majority of readers agree that 1. Online gambling should be regulated vs. outlawed 2. There are better targets of police resources then perpetually trying to outwit the gambling rings 3. Tax proceeds and economic gain (see UK online gambling industry) can be a net positive effect

So then I ask myself, why then have we for years made this illegal? Perhaps in these situations its because there is a special interest involved that is against online gambling vs. public opinion or reason. Traditional casino gambling is opposed to online because it decentralizes their industry and forces new competitors in. You no longer would need to fly to Vegas or go to Atlantic city or visit your regional Native American casino. However, these groups have spent billions on infrastructure and even more on marketing. The online form of gambling does not change the "vice" but it does fundamentally change the business model of a multi-billion dollar industry today.
Jordan Davies (Huntington, Vermont)
Gambling is throwing money away. It is wasteful, stupid, and pointless unless you own the casino or internet business which makes the money. I say prosecute these people, take down the sites permanently, and make gambling over the internet illegal, period.
Dan Stewart (Miami)
If you feel gambling is "wasteful, stupid, and pointless," then don't gamble. But, why impose your beliefs on other people?

Can gambling really be so bad that it’s worth putting people in cages or even the use of lethal government violence to enforce its illegality?

By the way, I happen to agree with you assessment of gambling and I don't play casino games of chance or lotteries. I have been, however, an executive in FICC derivatives trading on Wall St. for 30 years and am a senior partner in a Connecticut hedge fund.

As an expert in quantitative analysis, computational finance and probability mathematics, I can assure you that, at the end of the day, there is little material difference between a lottery ticket and a US Treasury bond, and all manner of investment and speculation in between. All are simply mathematical expressions of the likelihood and magnitude of risk, and their varying risk reward profiles simply a reflection of the varying needs and desires of market participants.

Your position is rationally, intellectually and philosophically indefensible.
Rick (Summit, NJ)
New York State is building six new casinos. There's gambling on horse racing in Belmont and Saratoga and the state used to have off track betting parlors. There's also a lottery. Many newspapers in New York state are paid for by ads offering bus rides to Atlantic City and Connecticut. New Jersey now allows Internet gambling and also has horse racing and a lottery. And yet here's an expose about how shocked, shocked the New York Times is that there's gambling going on.
Jim (North Carolina)
By the end of the day, this forum will be full of anti-gambling messages, including the occasional sad tale of a specific family ruined because of it.
And then there will be many many replies from people saying that gambling isn't addictive to everyone, "especially not me" and that they, as consenting adults should be allowed to gamble.
And the tone of those replies will be high-pitched and oddly urgent, as they protest too much.

Really, what is the point of gambling? There isn't any except addiction for one group, and vast profits for the PT Barnums taking advantage of them.
Paying the freight are wives and children, and their burdens add to those of society.
OK, so it's not addictive? Then why not go find some other pointless activity to while away your time, one that doesn't drag your family and society down every time you place a bet?
Frank Ogden (Leland, NC)
Good Morning: I want to thank you for your coverage of our obsession with fantasy sports. I appreciate the new information and details into this new cottage industry.

Keep up the GOOD WORK!!!!
ceanf (baltimore)
meanwhile, a good 40% of our murders and other true crimes go unsolved. but then again, finding a murderer or rapist doesn't bring millions and millions of dollars onto the coffers of the biggest racket of all...
K Henderson (NYC)
A great article and well-researched

Here's the thing: if our elected officials REALLY wanted to outlaw online sports betting they would. Apparently there are not enough "perks" in it for politicians to do so.
Brendan (Reston, Virginia)
The sensible solution is to legalize, regulate and tax it, just like Vegas does. The elaborate operation described in the article arises purely because of US laws -- the same activity is perfectly legal in many other countries, including many other "advanced" countries, around the world, and is simply subject to licensing. regulatory and tax regimes. If we are concerned about people becoming problem gamblers, that same logic applies to alcohol, and banning that was also spectacularly unsuccessful.
Sherwood (South Florida)
I worked in a casino for 25 years, my daughter works in Las Vegas, my son worked as a casino executive, my friends are casino employees world wide. We work in a business that never sleeps, Casinos are sensational money makers, all we do is open the doors. No cheating, no "Mob" guys, just regular employees making a pretty good living. If people want to gamble so be it. As we say in Casino world "pay the winners" "take the losing bets". I can only tell you that big casinos are a lot better then placing bets on the street. People watch to many movies about casino crimes.
mingsphinx (Singapore)
pinnaclesports.com cannot be accessed in Singapore. Anyone trying to do so will see the following message:

"The website you are trying to access is unavailable as it contains prohibited material.

For more information, please visit the following page:
http://www.mda.gov.sg/RegulationsAndLicensing/ContentStandardsAndClassif..."

If investigators find anyone who is purportedly from Singapore listed as a Pinnacle customer, they need to look into it.

That said, why is sports betting even banned? If people can bet on horses, dogs and buy lottery tickets, why can they not bet on sporting events? It makes the game so much more exciting when you have money riding on it.
John M. Sweeney (Anchorage, AK)
A major take-out article like this should expose, illuminate and inform. This does none of that. There's not one thing in here we didn't know 10 years ago.
As a former (and possibly future) illegal local mainland operator, I certainly hope gambling is not legalized. By the way, there are thousands of mainland operators across the country who consider themselves on the same skill level as Mr. Tomchin.
M Harvey (NYC)
I thought it was well known that online gambling is illegal in the U.S. only because the gambling "establishment" (i.e., Adelson, Wynn, etc.) wanted it to be illegal as to not siphon off its revenue and to give them time to build the technology to compete and dominate the online market as they do the brick and mortar market. Yes, for some, gambling is an addiction. But it is the same addiction whether it is done through Vegas, Atlantic City, Indian Reservations, State lotteries, or online. Addicted? Get help. Otherwise, this country has a lot of more important problems it could spend its time and energy solving. Protecting billionaire casino owners IS NOT one of them. Legalize it. Tax it. It's called competition, get used to it.
gino (santa rosa)
high skool investigative expose ! get yer skoop niskers into following the money to the politicians who are protecting, in no particular order, the interests of mob operated bookies, vegas, and, as joe bob called 'em, the southern babtists....one helluva lot of money is being paid to verrrrry prominent powerful
people, otherwise the whole shebang would be legalized and regulated, like UK,
Canada, NZ, Australia, Ireland...common fookin' sense...the USA needs help,
we are just so screwed up on every taxable common sense revenue source...
Village Idiot (Sonoma)
10,000 years of civilization and counting, and fools and gold continue to be parted.
Unlike prostitution where the ladies are often sex-slaved & trafficked against their will, gambling -- even crooked gambling -- is another victimless 'crime' that isn't worth a penny of prosecutorial budget, but the IRS could certainly pick up a nice chunk of change if Congress wasn't so low-energy.
Jimmy (Greenville, North Carolina)
Imagine how much simpler life would be if we only legalized gambling, prostitution and drugs. People will always do drugs, gamble and pay for sex. Make it legal and let the government tax it. Give people a choice. Who are you to tell me I cannot make a bet on the Super Bowl?
MCS (New York)
I have a friend won two million dollars playing poker. He's depressed, spends much of his time entangled with what I see as prostitutes, women who hang out at the casino and latch onto the winners. He's paranoid about the intentions of lifelong friends who hold 9-5 jobs and struggle to get by. That's the saddest part, parting with a few hundred to help a friend is overstepping his boundary, yet tens of thousands on a prostitute he barely knows and will be gone in a matter of weeks. He's socially awkward, has spent his entire teen years life playing the game online and in real life. I don't see things going very well for him. He and his circle of friends are all the same, each m,ore ill mannered and messed up than the next. But, they have the armor of money which creates the impression of being a together, balanced person. Nothing can be further from truth. His parents encouraged this stuff, and society does too. He is in my opinion an addict, with every trait in place. Denial and paranoia the most evident of all. I'm not against legalizing it, but like alcohol, gambling creates a lot of misery for a good many people. Awareness by the industry is what's needed. A campaign to bring the issue to light. They won't, because the foundation is built on primarily human misery. That's where it differs from alcohol.
Paul (Nevada)
Interesting piece. People are going to gamble, it is now so firmly embedded in our culture WS no longer denies it is a casino. Grew up in LV area. Legality only slows down the credit biz, but more betting on sports probably goes on in NY City bars than LV. It is just a good place for bookies to lay off bets. Don't expect law enforcement to win this one. Why not do themselves a favor and devote resources to taking down the banking cartel in NY city, which is a more laudable goal.
jpduffy3 (New York, NY)
Something is not quite right here. We have had the NSA monitoring all sorts of communications, and, with the US being one of the prime gambling markets, the NSA must have accumulated an enormous amount of data related to gambling activities discussed in the article. There are also companies in the US that have facilitated the use of the internet by the gambling companies discussed in the article, and the records of those US companies are no doubt available. Also, the article suggests that some people have been able to penetrate the efforts to mask what is going on, leading to the suspicion that the task for law enforcement is difficult but not impossible. When there is a lot of money involved in illegal activities and government allegedly cannot do anything about it, it leads one to wonder who is getting paid off, and how are the gambling companies making the pay offs? Since much of this is off-shore, is the pay off money going to accounts off shore?
Gary Ferrini (Shenandoah Valley)
While I don't gamble, neither do I see any reason for it to be illegal and if there is, why does our sainted government see fit to run lotteries which are certainly gambling and even more certainly drain the limited funds of people who have almost no chance of escaping poverty besides the absurd dreams of a lottery victory? Then there is horse racing, legal in various states. Of course, let's not forget casino gambling in Nevada and various exempt Native American lands? All of that aside, why is it the purview of government to interfere at all and why is the Times so obsessed with this subject when it might be investigating real issues; those matters such as war, financial malfeasance, violent crime and matters which truly plague America? (by the way, if gambling is risking money, then what makes it any different than investing or even simply opening a small business? Gambling and risk are endemic to life and in a capitalist society, hardly a sin. Every entrepreneur is in some sense, a gambler. The economy depends on it.)
Jim Driscoll (East Windsor, CT)
Let me get this straight...state lotteries, church raffles, online sport "contest" sites such as Fan Duel, casinos, the risky financial maneuverings of big banks... all are legal, but this type of gambling is not?
Seriously?
seeing with open eyes (usa)
So online sports betting is worse that nanosecond hedgefund trading???? Oh I guess that's because the 99% participate rather than only the 1%.
Dan Stewart (Miami)
The reason online gambling is illegal is because Shelly Adelson (et al), one of the largest political contributors in the US, wants it that way.

He's spent tens of millions of dollars bribing Congress, regulators and local prosecutors to make sure it stays illegal. Why? Because he owns the Sands Casino in Vegas and various other gaming venues and properties worldwide and wants the revenue for his business.

Ironic, that bribing politicians, a corrupt practice that in fact does actually harm others, is legal in the US and gambing from home, an activity between consenting adults that harms no one, is illegal.
A. Moursund (Kensington, MD)
Whatever scandal there is in an operation like this pales in comparison to the far greater scandal of state sponsored lottery rackets and other forms of state-encouraged gambling. At least Pinnacle isn't plastering the airwaves with deceptive ads that give the suckers the idea that they might actually come out ahead.

Just to give one example of the moral level that government lotteries will sink to in order to entice people to throw away their money: On Martin Luther King's birthday in the mid-1990's, the DC Lottery ran an ad in the City Paper that showed a picture of Dr. King, with this caption:

"HE, TOO, had a dream. DC Lottery".
Todd Hawkins (Charlottesville, VA)
There's no reason, and no difference, sports betting should be illegal if "investing" in the markets is legal. It's all gambling and it's all rigged.
sweinst254 (nyc)
Once again, the government is waging an unwinnable battle against allowing people their vices. It didn't work with the Volstead Amendment, it isn't working with drugs or prostitution, and it isn't working with sports gambling.

At least if it were legalized, the government could be collecting high taxes and regulating it instead of losing all that revenue.
sam (sydney, australia)
How about an article that looks at online sports gambling fairly. let's examine how they do it in Australia and Europe as a business. Not mafia controlled, but publicly traded companies. Take some of the risk of match fixing out. Collect the tax revenue. I don't bet, but where I live, I could place abet legally, on my phone in a second with any number of companies.
Just try and make sure the ads aren't everywhere and directed at kids. I can't stand all the fantasy ads.
nzierler (New Hartford)
The prohibition of online sports betting is as inane as the Volstead Act, which prohibited the production and distribution of alcoholic beverages. Legalizing it would generate billions of dollars in taxes and wipe out any criminal elements that spawn from this type of enterprise. No brainer.
ralph Petrillo (nyc)
Why not just legalize this type of gambling once and for all. Taxes would be collected from the gains, new jobs would be created, and just as marijuana was illegal, the same people gambling illegally would gamble legally. So betting in a casino is legal, going to a racetrack, however betting on Professional Sports is a hazard unless in Las Vegas. Almost to silly to discuss. Simply legalize it by starting in ten states to see the overall effects, and then allow each state to decide on their own. Many people invest in the stock market as a gamble. How is this any different? The more actions that were considered illegal become legal the less crimes actually committed. Going to jail for smoking marijuana or betting on Monday Night Football is just idiotic. Tax it all. Stop wasting the time of investigators on gambling. Legalize it.
efb (Long Island, NY)
Even if on-line gambling were legal, the desire to avoid income taxes on winnings would still be reason enough to wager only with the sites where that wouldn't be an issue. I'm sure legalized bookies would be successful, but the problem wouldn't go away.
K Henderson (NYC)

Answer: Because most large-scale 21st century gambling is exploitative and intentionally designed to be so. Making online-gambling "legal" wouldnt change the fact that the "House. Always. Wins." Do we as a nation really want to embrace that?
Ben Hogan (19th hole)
Sheldon Adelson and his team of lobbyists will not allow this.
bob garcia (miami)
Of course the NSA has all the traffic link information, the actual traffic, and all the phone calls. Which raises the question of under what circumstances would all that data be used?
Dan Stewart (Miami)
You don't think anyone at NSA, with their access to all sorts of private and nonpublic information on everything from fantasy football to corporate merger and aquisition info, would ever use that information to make money? --e.g., place stock trades on insider information?
George Mastronj (Lake Worth)
I have a friend,that loses most of his hard earned money betting online. It is a addiction, gambling. It is just too easy to place a bet online. This company needs to be taking down,for good.
mraleig (NH)
So instead of taking down a site where virtually everyone who gambles does not become addicted wouldn't it make more sense for your friend to get the help he needs rather than depriving other adults who are not addicted of being able to gamble with their own money.
Dan Stewart (Miami)
Thought the US was supposed to be a free country. Why is it criminalizing activities between two consenting adults that harms no one? Does the US, the world's biggest jailer, really need even more people in prison?
Lynn (Greenville, SC)
@ mraleig

"... where virtually everyone who gambles does not become addicted ..."

Tell us where we can see empirical evidence to back up this claim.
Dale (Wisconsin)
If it cannot be controlled offshore, it certainly cannot be controlled here, no matter how well the laws are written and how many FBI agents we hire to police this.

Make it legal, and tax it, and someone will do the illegal to run more profit by not paying tax.

Gambling is not a clean, victim free industry.

I say time to unleash the NSA at jamming their sites. It should be child's play on break time for their talent in hand.
Dan Stewart (Miami)
Just can't mind your own business and let others do what they please as long as they hurt no one else, right? If John Doe wants to bet online from the comfort of his home, instead of going to Vegas, Atlantic City, Conn, etc, why try to stop him by turning him and his service provider into criminals? Senseless authoritarians who can't resist the compulsion to control others.
ConAmore (VA)
That pesky Constitutional principle, Due Process of Law, would militate against that "solution."
Dave (Queens)
The article I assume is attempting to simplify for non-techies what a CDN does (and presumably for the government too) and kinda doesn't understand the fundamentals.

The laws are poorly framed for the internet, and the attempts to shoehorn them into it from phones and telegraphs when the laws were made, does a lot more harm than good. If you twist around the concepts enough to make them fit the laws in order to get a conviction, which even this article does, of course a company that could be construed as doing illegal things would pack up and get out of town ASAP, because it's sure hard to defend yourself when we've got a technologically backwards government that creates fairly awful laws when it comes to how people utilize technology.

The CDN has no business being involved in this. You might as well start to prosecute ConED for providing them power, Western Union for processing wire payments, and attempt to find a representative for the Sun in order to prove that by the transference of heat molecules to the earth in Curaçao, the Sun was complicit in allowing people to gamble.

Come on.

You guys found a way around the roadblocks to betting (not difficult, people do the same thing to watch sporting events blacked out in the US) and then got your account killed and your money taken. Without admitting it, it's a little difficult for anyone to find out. Working as intended I think.

Stuff should be legal in any case, and this proves it.
Traveling Man (Alabama)
I live in Birmingham Alabama at one time sports betting sports betting here was considered the second largest market per capita outside of Las Vegas. The bookies that operate now use private Internet sites and PayPal to conduct business instead of bars.

Thus article fails to discuss the continued presence of the underground sports gambling that exist in every town in America. The time to legalize, regulate, and license operators is long passed.
Jon (NM)
Allow gambling is a legal activity that brings a lot of revenue into my state, gambling, on anything, at any location, is just stupid.

I guess that's why our next president will be Donald "Casinos" Trump.
Frank (Los Angeles)
Not sure what the Times hopes to accomplish with this "expose." Basically online gambling is illegal to protect billionaires like Sheldon Adelson that only want you losing money in his casino. Current laws make it easy for US customers to spend money online gambling, but harder to collect. As always, Americans lose when the government acts like a nanny state.
KJS (Fort Lauderdale,Fl.)
Time to legalize,regulate and tax this industry. People will always find a way around the laws.
Resources are better spent elsewhere.
ceanf (baltimore)
problem there is, elsewhere doesn't have millions and millions of dollars for them to steal. unfortunately, our justice system is no longer focused on justice. just profits.