Chapter One "The Rise and Fall of BetOnSports" pages 6-9/156

Chapter One
Entering the World of Online Gaming


My career in the offshore gaming industry started during the pioneer days of the industry back in 1999. Most operations during the early years were offshore sports books founded by street bookmakers who took most of their action via the telephone. The bookmakers would eventually utilize the internet to run a clean business which was questionable based on the 1961 Telephone Wire Act which made it illegal to place bets over the telephone. Other than that law the US government really had no jurisdiction over offshore based gaming companies. Still today the laws are very unclear and in the early years laws that prohibited online gambling were non-existent outside of the 1961 Wire Act.

One of the original companies WWTS was abbreviated for World Wide Tele-Sports. My first client for my ad firm was Royal Sports and they took all of their action via the telephone up until 2001. Offshore sports books was a more appropriate term for some of the giant companies today that operate online gaming companies in places that extend from the island of Malta to Panama City, Panama and in other locales throughout the world where a licensee of some good software can promote gambling over the internet but no city was alive like San Jose, Costa Rica.

The city of San Jose, Costa Rica was abuzz back at the turn of the century as the capital of offshore gaming. San Jose today compared to than is a ghost town for online gaming with only a few companies left behind as most companies have fled under government pressures stemming from the United States. Just about every time you would go out no matter where you went to a bar, restaurant, hotel, or cat house you would find offshore gaming owners, employees and even a few consultants like myself blowing a lot of cash while enjoying the power of the US dollar in Costa Rica. It was a fun time, a wild time, and a profitable time. Unfortunately the leader of the era didn't want to transition the industry into a new era of legal acceptance from the country (USA) that supported better than 80% of the revenues for the online gaming industry. Today atop the Mall San Pablo is vacant office space that once housed the shrine of online gaming highlighted by a roof top swim pool with the logo of BetOnSports at the bottom of the pool. This is where my career began.

It was my job to convince media executives that running advertisements for these companies was not illegal. Most law makers had no idea offshore sports books even existed and laws were non-existent. I made sure media executives were equipped with legal rulings to insure my clients could advertise in the United States and with no precedence I had to find cases which had relative interpretations. I did considerable research on the subject and introduced a 1998 Supreme Court Case in 2000 which interpreted correctly was favorable to the offshore gambling companies.

The Supreme Court case was the New Orleans Broadcasters Association versus the United States and the key interpretation was the Central Hudson Test which states that if a company is legal and licensed in the location where the gambling takes place than the people of the United States have the right to hear about the business. The Supreme Court was referring to the Louisiana Casinos advertising in South Carolina and my interpretation was the offshore gaming companies were licensed in countries like Costa Rica and with the player's money being deposited into an account in Costa Rica than the action takes place in Costa Rica as opposed to where ever the gambler resides, more often than not in the US.

I loved sports gambling as a profession because it kept me around sports. It also kept me from gambling as I was always entertained by how the house performed. It always has been fun but you don’t have to be a sports nut like myself to run a sports book or an online gambling establishment. Sports betting is strictly about the numbers and a handful of experts in Las Vegas that establish the odds. Fact is the house may experience a losing streak but the house eventually always wins. There have been a few underfunded sports books that were not prepared to handle losses and have been put out of business so there are exceptions. One sports book named Fair Deal in the Caribbean was a one man operation where the general manager had to work from the first game to the final buzzer 7 days a week trying to make the company thrive. The company failed and was slow to make payments to winning customers but luckily a neighbor sports book assumed all of the debts and nothing was ever publicized about the default.

As an advertising agency owner, I have dealt with many very nice people, especially in Curacao, Panama, Jamaica, and Costa Rica. One gentleman, Mike Finerty of L-Book Sports in Curacao who sold his company for a few million dollars told me to always get money up front from anyone in the online gaming industry, even him. I tend to only see the good in people but those words of warning should not have been ignored by me because………………………….

Unfortunately for the offshore/online gaming industry too many shady characters have used the internet and international borders to take bets and have basically stolen money from everyday people like you, your neighbor, and anyone else that understands how to use the internet or telephone. Furthermore ad agencies, production houses, national and global media companies have also been subject to some bad apples in the industry that didn’t feel the need to pay up for services rendered while hiding behind alias names thousands of miles away from their customers in a different country. One of the most corrupt bookmakers ever to come through the industry that I have met is Claude Ripner. Claude founded BetOnSports and the company thrived off of the work of many excellent professionals that unfortunately couldn’t get along which led to the demise along with a few viruses in the company that couldn’t make the transition from street bookmaker to legitimate business practices.

Claude was a cutthroat businessman in my opinion that ended up in the legal arms of the United States penal system because of his greed. He was also aided by those closest to him that were eternally trying to gain his approval by being more cutthroat but his protégés were not nearly as careful about adhering to the law. Claude probably looked the other way in certain cases because it was about making and saving a few bucks, anything for more profit.