Battle Over ‘Flag Drop’ Horse Races Could Affect Florida Slot Expansion

Casino Watch Focus has not only reported on the ongoing Florida Slot expansion case in before their Supreme court, but also on other creative attempts at allowing slots through flag drop racing. The issue at hand is that slot machines in Florida can be allowed at certain horse & dog racing tracks and various pari-mutual facilities, but fairly specific rules exist as to what constitutes proper racing. Four years ago permits were allowed for quarter-barrel racing, but the court ruled it wasn’t proper racing. The State then allowed for “flag drop” races where the two horses effectively race against each other. Its been a fairly contentious issue that has clear gambling expansion implications in Florida. Sunshine State News explains: 

Gambling regulators and a tiny horse track in Hamilton County are at odds over whether a series of “flag drop” races two summers ago, which one former state official described as “a sham,” constituted legitimate horse races.

“Events that were called races at the time were held, however it’s the division’s position that the races were not races of speed, and therefore do not count as races,” Caitlin Mawn, assistant general counsel for the Department of Business and Professional Regulation, argued Monday. The department includes the Division of Pari-Mutuel Wagering.

In about one-third of the races, “the horse didn’t run or just walked or the rider fell off,” Haskel testified. The flag drop “in no way, shape or form resembles a horse race,” Haskel said. “Nothing about Hamilton Downs is real in terms of race track standards,” he said.

The ruling from Administrative Law Judge E. Gary Early, who starting hearing testimony Monday in what is expected to be a two-day hearing, could play a role in whether the track is eligible in the future to add lucrative slot machines.

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A Brief Look at Crime 04/11 – 04/17

190 deaths linked to problem gambling in eight years, report says

Nearly 200 people have taken their own lives in Quebec because of problems related to compulsive gambling in the space of nearly a decade. CJAD News has obtained a coroner’s report that says between 190 compulsive gamblers killed themselves during a period lasting between 2005 and 2013. One of the cases the coroner looked into was a man who threw himself off a bridge near the Montreal Casino last September. The 59-year-old man had just gambled away a lot of money — and even left a note that said “Bye Bye” on the gaming table before leaving. “Let me be clear, one suicide is too many,” Lavoie says. “Loto-Quebec endeavors to help customers who experience gambling-related problems, even though those people represent a minority of out clientele.”

Panama Papers expose link to Amaya Gaming insider trading investigation

The so-called Panama Papers, which detail the use of shell companies by
the planet’s rich and powerful, contain possible links to the insider trading scandal involving Canadian online gambling operator*Amaya GA. This weekend’s release of 11.5m confidential documents belonging to Panamanian corporate service provider Mossack Fonseca has already prompted the Prime Minister of Iceland to resign and many other prominent figures are expected to find themselves in similarly sticky wickets as their shadowy business connections are brought to light. Online registries list a number of gambling websites hosted on Zapha.com’s DNS server, including *BetonUSA.com*, the US-facing online sportsbook owned by Josh and his partner *Craig Levett* until the pair claimed to have sold their interests following the US government’s 2006 passage of the Unlawful Internet Gambling Enforcement Act (UIGEA). Other sites associated with Zhapa include *Oddsmaker.ag*, another notorious slow/no-pay US-facing sportsbook that launched following the UIGEA, and Oddsmaker’s affiliate site Referincome.com. Both Josh and Levett were originally rumored to be linked with Oddsmaker but someone claiming to be Levett told Bookmakers Review in 2007 that he had no connection with the site.

Poker Player Indicted In New York Over Sports Betting

A Queens County grand jury on Tuesday indicted eight individuals, including poker player Jay Sharon, over an alleged illegal sports gambling operation that is accused of booking more than $3.5 million in bets annually. The government said that the operation involved websites and toll-free telephone numbers set up to facilitate the bets. The defendants are charged with enterprise corruption, a violation of New York State’s Organized Crime Control Act, as well as money laundering, promoting gambling and conspiracy. The defendants are in custody in New York and Las Vegas, and are awaiting arraignment in Queens County Supreme Court, according to a press release. Sharon, a 47-year-old poker player with more $210,000 in lifetime tournament earnings, was the alleged boss of the operation. The NYPD took $93,000 in cash from the men.

Man convicted of executing 4 people at NJ gambling club

A man serving four back-to-back life sentences for the cold-blooded slaying of four people at an underground gambling club financed by the FBI has lost another appeal. David Baylor, now 36, was convicted in 2008 of shooting four victims, pumping a single bullet into each of their heads, during a robbery on Dec. 14, 2005. The after-hours club in this city was secretly being kept open by federal investigators who wanted to use it to attract gang members they were investigating. One of Baylor’s victim’s pleaded for her life before he pulled the trigger — and Baylor later joked about the massacre, according to an accomplice who testified against him. Baylor has already lost previous appeals of the verdict and sentencing, which puts him away for four consecutive life sentences for the murders, plus another 10 years on top of that for a gun charge. The state Supreme Court has declined to take up his case.

Las Vegas Sands to pay $9 million as SEC investigation ends 

Las Vegas Sands Corp. will pay a $9 million fine and be required to hire an independent consultant on its business activities in China and Macau under a settlement reached with the Securities and Exchange Commission Thursday. The company that owns The Venetian and Palazzo on the Las Vegas Strip, as well as properties in Macau, Singapore and Pennsylvania, said the settlement concludes a six-year SEC investigation involving compliance with the United States Foreign Corrupt Practices Act that found no evidence of corrupt intent or bribery by the company. The United States Foreign Corrupt Practices Act makes it illegal for companies and their executives to attempt to influence foreign government officials with personal payments.

Rivers Casino pays $1.65M after mob inquiry  

Rivers Casino has paid one of the largest gaming-related fines in modern times — $1.65 million — following an Illinois Gaming Board investigation spurred in part by questions over a security and maintenance contractor’s ties to reputed mob figures. Last year, the Better Government Association discovered that Rivers — Illinois’ newest and most lucrative casino — hired United Service Cos. for security and cleaning work at the Des Plaines gaming site. United is run by Richard “Rick” Simon, who has had admitted business and personal ties to reputed mob figures, including his late friend and boss, Ben Stein. Simon made news earlier in the week after the Sun-Times and BGA reported that a firm headed by former Chicago Police Supt. Garry McCarthy was working with one of Simon’s companies. The BGA asked Rivers officials last May about United’s hiring because Illinois casinos are not supposed to have even a hint of organized crime connections — something that helped sink Rosemont’s years-long push to score a gaming license.

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Congressional Committee to Take Up Daily Fantasy Sports Issue

Casino Watch Focus has reported many times on the newest form of sports gambling known as Daily Fantasy Sports. Also known as DFS, it’s an industry that very clearly represents sports gambling, and many states have either clarified their state rules to inform the industry that DFS is illegal, or have decided it represents gambling with no protection for players and they have decided to regulate the industry. The two most prominent companies involved, DraftKings and FanDuel, have even tried to proactively pass internal regulations in hopes of avoiding wide-scale government regulations. However, with the industry coming under fire from so many sources, including not only states, but also the FBI and the US Attorney general, its no surprise that Congress has decided to take a strong look at the issues at hand. An online source reports:  

A senior Democratic Energy and Commerce source has confirmed to Legal
Sports Report that the Subcommittee on Commerce, Manufacturing, and
Trade is planning a May 11 hearing on daily fantasy sports. That committee is housed within the Energy and Commerce Committee, chaired by *Fred Upton* (R-MI). *Frank Pallone* (D-NJ) is the ranking Democratic member.

There is *no active legislation* at the federal level that addresses daily fantasy sports. According to the source, the subcommittee will examine the *nature of DFS* as a product and the *current legal status* of the product. Ongoing legislative developments at the state level, consumer protection issues, and the potential role of the federal government will also be topics on the table.

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A Brief Look at Crime 04/04 – 04/10

Warden, wife took $132K to pay Moose club gambling debts

The state attorney general says a Pennsylvania county jail warden and his wife stole $132,000 from a Moose lodge, largely to cover losses they incurred gambling at the club. Crawford County Warden Timothy Lewis and his wife, Debra, were arraigned Thursday on theft-related charges. They were officers of the Moose lodge in East Fairfield Township when they allegedly took the money between May 2011 and October 2014. Investigators say club records showed the couple lost more than $64,000 playing unspecified “small games of chance,” which social clubs in Pennsylvania can offer to raise money. Among other things, Lewis allegedly rigged a raffle in which he won $2,000.

Compulsive gambling brings shame, prison, death

Compulsive gambling has led to the social and financial ruin of many otherwise longstanding pillars of society since the casino boats arrived in the Quad-Cities in 1991. Among them, Marilyn Davis, who served 40 years as Sherrard’s village clerk before she was sent to prison at the age of 74 for embezzling approximately $282,000 from village coffers. The prime motive, authorities said, was to finance trips to the casinos. In 2007, a Davenport woman was convicted of child endangerment after leaving her young son home alone while she gambled at a riverboat casino. In June of that year, a 76-year-old man was convicted of trying to bludgeon to death his 81-year-old neighbor during a fight that started, prosecutors said, when the woman refused to give him money for gambling at Scott County casinos. There have been other examples: Dig deep enough in about any local embezzlement case over the last 25 years, and you’ll find some stolen money ended up in the pockets of casino operators. Once-honest bookkeepers and treasurers at businesses, churches and social-service agencies all have fallen victim to the allure of a turning card or the spin of slot-machine symbols.

Cumberland County probe of gambling cafes uncovers possible terrorist ties

The Internet gambling cafes that had operated with impunity in strip shopping centers throughout Cumberland County are all closed now. A state Supreme Court decision in December 2012 took care of most of them when it declared Internet sweepstakes gambling illegal. Butler found himself up against formidable opposition. Lobbyists for the gaming industry argued that Internet gambling was little different than playing legalized bingo or the N.C. Education Lottery. They said that, collectively, the cafes employed thousands of people and provided hundreds of thousands of dollars in fees to the local municipalities they operated in. No one, they argued, was being hurt by them. Butler saw it far differently. In his eyes, the cafes were an eyesore that fed off the poor and people addicted to gambling. Mitchell said, that deputies discovered sweepstakes’ money was going overseas. The deputies had executed a search warrant at a house near an illegal gambling establishment off Yadkin Road when they uncovered documents indicating that money from the operation was being sent to Yemen, Mitchell said. He said that case and others with ties to foreign countries are being investigated by federal agents with the Department of Homeland Security’s Immigration and Customs Enforcement Division and the Internal Revenue Service. Mitchell said the discovery that money was going overseas is especially frightening, given the amount of money being made by the gambling rings.

Palm Harbor con man sentenced to 35 years in prison

It’s judgment day for convicted con man Robert Fletcher. After years of lying, cheating and tricking victims out of their money with his fraudulent investment schemes, Fletcher was sentenced on Friday to 35 years in prison with 30 years of probation. He’ll be 112 years old by the time he finishes that sentence. Fletcher must also pay more than $376,000 in restitution to his victims. Fletcher told the judge a gambling addiction drove him to victimize his own family, friends and strangers alike without any remorse until now. Fletcher claims he’s found a new relationship with God and will dedicate himself to paying back his victims if given the opportunity. Judge Andrews said he doesn’t believe Fletcher has found God, or stopped lying, or has a gambling addiction and told him “I don’t know who you are.”

Sioux Falls record company owner pleads guilty to fraud

The owner of a Sioux Falls-based record company has admitted to gambling away more than $1 million in investment money. Madhouse Entertainment founder Michael Zimmer was arrested in January on eight counts of federal wire fraud. The Argus Leader reports that he pleaded guilty to one count on Monday. Zimmer was accused of asking people to invest in his company to promote rap concerts. Authorities allege the concerts never happened, and Zimmer used most of the money for gambling trips to Las Vegas; Atlantic City, New Jersey; and Larchwood, Iowa. Zimmer was accused of stealing more than $1.1 million from investors beginning in July 2014. He faces up to 20 years in federal prison during his sentencing June 27.

Accountant Who Stole $4M From Religious Center Gets Prison 

A California certified public accountant who stole more than $4 million from a religious center in New Jersey has been sentenced to nearly five years in prison. Federal prosecutors said Tuesday that Donald Gridiron must also pay about $5.1 million in restitution. The 51-year-old Pomona man had pleaded guilty in September to wire fraud and filing a false tax return. Prosecutors say Gridiron used his job with the worship center in Rahway and his status with a California nonprofit to illegally syphon money without their consent. They say he transferred more than $4 million overall to accounts he controlled. Gridiron used the funds for personal expenses, including mortgage payments, luxury car payments and gambling. He also failed to report the income on his tax returns.

For more information on the dangers of gambling, please visit CASINO WATCH & CASINO WATCH FOUNDATION


Gambling Taxes are only Short-Term Fixes for States looking for Sustainable Revenue Streams

Casino Watch Focus has reported many times on various states expanding gambling as a means to collect tax revenue, often times at the expense of its own citizens. 100 years ago virtually all forms of gambling were illegal, but slowly, one state at a time, gambling has been made legal by states looking to take their cut of the action. Some gambling expansion takes the form of lotteries, other expansion measures are full-scale casinos. The sales pitch is typically the same, why not allow some harmless fun that will allow the state to bring in some much needed tax revenue, often times promised to local educational causes. Now, a new study confirms what many have claimed, that any initial gains a state looking to expand gambling may see, don’t materialize to long term benefit. Reuters explains: 

Gambling provides only a short-term fix for U.S. states looking to boost revenue without having to turn to politically unpopular tax hikes on income and sales, according to a public policy research group’s study released on Tuesday. The Rockefeller Institute of Government said more than a dozen states legalized or expanded gambling in the wake of last decade’s Great Recession.

“History shows that in the long-run the growth in state revenues from gambling activities slows or even reverses and declines,” the study said. The study comes as some states consider whether to expand gambling. 

In New Jersey, voters will decide in November whether to allow two new casinos in the north, close to New York City. Local officials in cash-strapped Atlantic City, currently the only area in New Jersey where gambling is allowed, say new casinos will cause the city to lose even more revenue.

With recovery of U.S. regional gaming revenues tepid, long-term headwinds will continue to weigh on the sector, Fitch Ratings said in a separate report on Tuesday. Barriers to growth include “slower wage growth, less certain retirement prospects for baby boomers, and alternative avenues for gambling,” Fitch said.

For more information on the dangers of gambling, please visit CASINO WATCH & CASINO WATCH FOUNDATION


A Brief Look at Crime 03/28 – 04/03

Feds say Missouri drug suspect dropped millions at casino 

Federal prosecutors say a man at the center of a large-scale southwest Missouri drug operation put more than $10 million into slot machines at an Oklahoma casino. Patrick Brigaudin, 54, of Springfield, was arrested late last month along with three other men for conspiracy to distribute large amounts of drugs. According to court documents, agents found large quantities of methamphetamine heroin in his garage on Feb. 29. Court documents say investigators determined that Brigaudin was a “large-scale methamphetamine distributor” in southwest Missouri. He has access to “enormous sums of money” and recently had traveled outside the U.S., prosecutors said in the motion. Data provided by Downstream Casino Resort in Quapaw, Oklahoma, show Brigaudin put nearly $10.1 million into slot machines between January 2009 and April 2015 and withdrew just over $8.4 million from them, prosecutors said.

 One suspect dead, officer hurt in casino shooting 

Video released by the FBI of a fatal officer-involved shooting appears to show the officer pointing his gun at two men who were walking into the Route 66 Casino on the Pueblo of Laguna early Thursday. What happened next is unclear, because the video stops. But authorities say shots rang out, leaving one of the men dead and the officer wounded. The other man was on the run Thursday night, according to the FBI. Officer Peter Tanzilli, 37, who has been with the Pueblo of Laguna Police Department for five years and is an Air Force veteran, was taken to a hospital Thursday morning with at least one gunshot wound. “Officer Tanzilli is in stable condition at the University of New Mexico Hospital,” Laguna Public Safety Director Jesse Orozco said in a news release. Authorities haven’t said how many times Tanzilli was shot or where on his body the gunshot wounds were.

Former OK State Senator Embezzled Millions due to Addiction

Former Oklahoma State Senator and Tulsa Better Business Bureau CEO Rick Brinkley is going to prison for embezzling almost $2 million from the BBB. “If I get overwhelmed by the $2 million dollars, part of my brain will tell me, ‘Go out and win it. Go out and win it.’ I can’t focus on things that trigger me to get back to the casino. I can say, ‘I will do whatever I can. I will work as hard as I can. I will do whatever the government tells me to do,’ but I can’t be overwhelmed and let it push me back to where it got me today.” I asked him how he reassures people he won’t do it again when he gets out. “I can’t,” he said. “I’m an addict. There’s not a day that goes by I don’t think about it. I think about gambling every day. All I can do is do what I have to do to help myself stay clean and do it one day at a time.” He said in court that sometimes people don’t find their true purpose until they hit rock bottom, so I asked him what that is. “My new purpose is to take what I went through and make sure people understand that other people get what you’re going through. I always thought I was the only one,” Brinkley said. “My stuff is over other than serving my sentence and paying my restitution, now my job is making sure nobody else walks this road.”

Georgetown man sentenced for tax evasion 

A former insurance salesman was sentenced today in U.S. District Court in Boston for evading taxes in connection with the theft of more than $470,000 that he stole from three clients, according to the U.S. Attorney’s office. Paul Disidoro, 64, of Georgetown was sentenced by U.S. District Judge William G. Young to 18 months in prison, three years of supervised release and restitution of $613,806. In December 2015, Disidoro pleaded guilty to attempting to evade taxes. For many years, Disidoro operated an insurance business in Massachusetts, and from 2007 through 2010 he also acted as a financial adviser for some clients, according to a statement from the office of U.S. Attorney Carmen M. Ortiz. During that period, Disidoro stole more than $470,000 from three clients and used the money for his personal benefit, including online gambling, the statement said. He concealed the income from his tax preparer, and failed to report the embezzled funds on his federal income tax returns. In doing so, Disidoro evaded $144,000 in taxes, according to the statement.

7 arrested after 3 shot in Atlantic City casino hotel room

An ongoing investigation of a shooting in an Atlantic City casino hotel room that left three people wounded has led to the arrests of seven people and the recovery of four handguns. Police say as many as 20 people were partying in a room at Taj Mahal Hotel and Casino when shots rang out on March 24. Officers did not find any victims in the room, but soon learned two juvenile males arrived at a hospital with gunshot wounds. A third juvenile victim was later arrested on gun charges. Four of the suspects are juveniles between the ages of 15 and 17.

Madison County man gets 28 months in prison for playing robber in staged bank robbery

 According to the U.S. Attorney’s office, on December 13 of that year, Liebheit called police to report a bank robbery. He said a masked person forced him into the bank at gunpoint before the bank opened. He described the suspect’s vehicle as a tan station wagon or crossover vehicle. He said he was forced to give the person more than $280,000 from the vault. The story fell apart when Bethalto police spotted Liebheit’s own truck leaving the bank after the robbery. The two had used a BB gun to make the holdup look real, prosecutors said. Court documents say he had “issues with gambling and significant debts.”

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Florida Supreme Court to Hear Oral Arguments in Key Gambling Expansion Case

Casino Watch Focus has reported on the ongoing Florida Supreme Court case involving slot machine expansion in Gadsden County. The local voters affirmed a ballot initiative to allow slot machines at Grenta Racing Track. At issue is the fact the Florida Legislature made slot machine law very clear when the explicitly made all slot machines illegal unless expressly allowed by State Law. The States claim is simply that communities cant simply vote to have gambling in their neighborhood without express permission by the legislature. The gambling expansion implications are huge for Florida. The Court recently  asked for written briefs and now they are setting dates for oral arguments. The St. Peters Blog reports: 

The Florida Supreme Court has set June 7 as the date it will hear oral argument in a case on expanding slot machines in the state. A favorable ruling by the court could expand slot machines to all six counties where voters passed slots referendums: Brevard, Gadsden, Hamilton, Lee, Palm Beach, and Washington. Opponents, such as No Casinos and former Gov. and U.S. Sen. Bob Graham, have said slots are illegal “lotteries” banned by the state constitution unless expressly permitted by law.

 For more information on the dangers of gambling, please visit CASINO WATCH & CASINO WATCH FOUNDATION


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