When news broke of Bodog founder Calvin Ayre’s indictment by Federal prosecutors in Maryland the gaming industry collectively sighed and said, “Here we go again.” And who could blame them?
Between web sites shuttered with the Department of Justice (DOJ) shield and indictments for money laundering, the whole scene bore an eerie resemblance to the dark days of Black Friday, or does it?
While Ayre’s indictment definitely impacts the affiliate marketing and online bookmaking businesses in the short term, it’s impact may not be as significant as you might think.
There’s no question that DOJ prosecutors, led by gaming arch-nemesis’ Richard C. Kay and Preet Bharara, are exacting a little payback from Ayre for his famous catch-me-if-you-can attitude towards gaming laws. A few years back he told Forbes Magazine, ” “We run a business that can’t actually be described as gambling in each country we operate in. But when you add it all together, it’s Internet gambling.” That’s the kind of thing that the Feds don’t forget.
Ayre has made a name for himself as an outside-the-law playboy billionaire who doesn’t pay U.S. taxes and doesn’t care much for authority. That’s makes for great copy on his popular website, but it won’t make you any friends in law enforcement. Chances are that Kay and Baharara have been patiently waiting for a chance to nail Ayre for reason they could find.
Online Poker Connection
Last December, the DOJ stunned the gaming world by announcing reinterpretation of the Wire Act used to prosecute gambling cases. Under the new look, the Act would only apply to sports betting and not poker. (Apparently the NFL and NCAA lobbyists have more clout in Washington D.C. than the gaming lobby.) While poker affiliates and players rejoiced at the decision, sports books did not.
It’s doubtful that this week’s events will slow down the rush to legalize online poker in states like California, Iowa and Nevada. There’s simply too much money in play in the form of potential tax revenues for that ride to slow down.
Sports Betting Remains Illegal
Another possibility is that the DOJ is seizing an opportunity to hit Ayre, while sending a message to online sports books that, “Online poker might be nearly legal, but sport betting is not.”
(Some have wondered if the same dynamic was behind the recent prosecution of Everleaf Poker on similar money laundering charges. )
After all, chasing after Ayre, and his cronies, probably won’t amount to much. Ayre is a billionaire foreign national living in Costa Rica and isn’t likely to set foot in the United States anytime soon.
On top of that, the main domain seized www.bodog.com had been all but abandoned by Ayre who saw the writing on the wall and moved his web assets from .com domains to .lv and .eu last year.
So what is the DOJ hoping to accomplish? Is this some sort of preparation for their expected fight against the State of New Jersey and their efforts to legalize sports betting? It’s hard to say at this point.
Impact on Affiliates
So how does the Ayre indictment impact the iGaming business? For the most part, it probably won’t have much impact at all. Unless an iGaming site is taking money from US players, there’s not much that even can happen. And sites that take American players should have expected something like to happen anyways.
Affiliates collecting revenue form American players will likely notice a drop in business as the move is likely to scare off US bettors for a while.
The big winner in this latest assault on the gaming industry is going to be old-fashioned bookies. Hardcore bettors always find a way to bet and they’ll brave the inconvenience of picking up the phone to put their money down.
What’s Next for Ayre
Given Ayre’s vast resources and non-existent ties to the United States, odds are he’s not going to be surrendering to US. Authorities but he hasn’t given much indication of how, or even if, he’ll fight this case. Whatever happens, Ayre remains defiant and will likely make life as difficult as possible for his prosecutors.
What do you think of the Ayre indictment? Let us know on our General Discussion Forum.