While New Jersey is undergoing legislative reform to permit intra-state online gaming, a group of 14 mob figures allegedly operated an illegal operation, offering an online service to players and taking advantage of large available profits.
A federal racketeering case unveiled yesterday showed a multi-million dollar online sports-betting operation run through a website hosted in Costa Rica – www.Beteage.com.
Fourteen individuals with ties to organised crime in New Jersey were arrested on racketeering conspiracy charges.
Of those arrested, 80-year-old boss of the Genovese crime family Joseph “Pepe” LaScala, referred in the press as the “Godfather of New Jersey”, and 11 associates appeared in Newark federal court charged with crimes related to a sports-betting website taking illegal wagers inside New Jersey. Until federal law permits, online gambling is strictly forbidden in the US.
Two of the defendants did not appear in court and one of the 14 convicted, Ken Baran was charged with transmitting wagering information, an offense that carries a maximum jail term of two years and up to a $250,000 fine.
The court declared that players were issued usernames and passwords to gain access to the sports betting website and that while bets were electronically forwarded to a location in Costa Rica, payouts and collections took place in cash in New Jersey.
Debts were often turned into loans with exuberant rates of interest and authorities claim members of the Genovese crime family would threaten violence to ensure all debts were collected.
“Law enforcement will use countermeasures that are just as sophisticated (as off-shore websites and internet-fueled gambling) to bring these criminal enterprises to justice,” said US Attorney Paul Fishman, “The acts alleged in this criminal complaint show that traditional organized crime continues to pursue its bread and butter, illegal gambling, loan-sharking and cargo theft.”
The strength of the allegations and the reported value of the operation indicates a strong appetite for online gambling in New Jersey and throughout the US.
As the DoJ looks to lift the ban on internet gambling and allow states to introduce their own regulatory measures, operations will be legitimised and prevent the industry losing out to such schemes.