A few years ago, online gambling all but put bookies out of business. But today, in Chicago, bookies are embracing the technology that almost made them extinct.
For example: BetChicago312.com is similar to mainstream gambling sites like Sportsbook or Bovada, except that placing a bet requires a password and having an existing member vouch for you.
‘‘It’s a tightly knit network with some professionals,’’ says John, an online gambler who asked to have his name withheld in fear of retaliation.
John estimates that 600 to 1,000 members gamble through BetChicago312. And with the NFL season just around the corner — traditionally when Las Vegas bookmakers see the most action — the outfit behind the website is actively recruiting more members and gearing up to make ‘‘hundreds of thousands of dollars a week,’’ John said.
‘‘Without a doubt, football season is where the action’s at,’’ John said. ‘‘There’s more member recruitment, more stupid bets — it’s just a cash cow.’’
In 2012, the Federal Bureau of Investigation in Chicago charged a father and son — Anthony and Dominic Butitta — with participating in an Internet gambling scheme that, according to federal documents, netted about $400,000 between 2005 and 2009. The duo operated Blackjacks Gentlemen’s Club in Elgin and were ultimately convicted of concealing more than $4.6 million of income from the IRS.
‘‘Obviously we are aware of online gambling,’’ said FBI Special Agent Joan Hyde. ‘‘We had a successful conviction in early 2012, but we can’t speak to ongoing investigations that we may or may not have . . . My hands are tied.”
BetChicago.com was registered in November 2011 to a user self-identified as Ole Svendsen. The contact address given is for the island nation of Vanuatu, located in the South Pacific Ocean, near Australia. Other domain names associated with this user’s IP address are gsbetting.com and luckybet365.com, which also require logins.
A phone call was made to the company associated with the IP address, but a man who answered the phone said, ‘‘We can give no specific information about the company,” and, “We do not host websites.’’
‘‘The people behind this are on such a professional level,’’ John said. ‘‘It is a different animal — the guys running the show are winning. They’re making the money. . . . The main guy probably has $3 to $4 million of cash on hand because people make $30,000 bets on a single game.’’
Members like John can bet on just about anything, from NFL games to guessing the winner of ABC’s ‘‘Dancing with the Stars.’’ Depending on your status in the ‘‘community,’’ you’re given a line of credit, which ranges from $2,000 to $50,000.
If John placed a bet and lost, he’d have to pay that out to his sponsor on Monday. If he won, he’d receive his winnings on Wednesday. It’s an all-cash business, John says.
Failing to pay a debt, however, becomes the responsibility of the sponsor.
‘‘We all do business together in some sense,’’ John said. ‘‘There is some sense of integrity, respect — [but] the moment someone [screws] someone over, you’re out. . . . The rule is simple: Never [screw] over another member.’’
John added that sponsors receive 10 percent of any lost bets made by newly recruited members. When asked if there were any enforcers — people who rough up ‘‘deadbeat debtors’’ — he refused to elaborate.
‘‘I get annoying when you owe me money,’’ John said. ‘‘If you lost like $200 and won’t pay, you just get cut off. If you lost a stack [$1,000], you better find a way to come up with that money. . . . There is some sense of integrity, respect with all of us. We call that respect ‘face.’ ’’
Before 2006, it was relatively easy to bet online and collect winnings. That all changed, however, after the Unlawful Internet Gaming Enforcement Act (UIGEA) was passed by Congress that same year.
The amendment was quietly slipped in a security bill at the last minute by senators Jon Kyl (R-Ariz.) and Bill Frist (R-Tenn.). The measure prohibits financial institutions such as Visa or American Express from knowingly accepting payments in connection with online gambling.
On April 15, 2011, a day also known as Black Friday in the gambling world, federal authorities shut down the three largest online gambling sites in America: Full Tilt Poker, PokerStars and Absolute Poker. Users who had thousands — or millions — of dollars in their accounts could no longer wager or withdraw funds.
Skokie native Matthew Shepsky said he was ‘‘devastated’’ when he first heard the news on that dark Friday.
‘‘I have a lot of money tied up right now; it’s still locked up,’’ Shepsky said. ‘‘All players in the U.S. have their money tied up, including mine.’’
When asked how much Shepsky has tied up with Full Tilt he said, ‘‘I’m embarrassed to say, but it’s a lot. Let’s just say it’s a nice car’s worth.’’
He later revealed he has more than $40,000 in limbo with Full Tilt Poker. Shepsky said he expects to get his money back within ‘‘six to eight months.’’
Recently, the Department of Justice hired The Garden City Group, a third-party claims adjuster, to distribute about $184 million owed to American players from Full Tilt.
About one month after Black Friday, federal authorities doubled down and closed a website similar to BetChicago312 called BetJerrys.com. More than 200 law-enforcement officials raided a strip mall in New York and seized $5.7 million in assets belonging to 57-year-old ringleader Joseph Stentella. According to federal documents, the online gambling scheme had about 600 members and brought in more than $100,000 a week, ‘‘especially during football season.’’
‘‘Of course, football season is where the most action comes,’’ said Bob Loeb, a Chicago-based criminal defense attorney. ‘‘It’s a losing battle to think the government can shut down sports gambling.’’
Excluding Nevada, New Jersey and Delaware, online gambling is illegal in the United States. Currently, Nevada is the only state with a site up and running. Other platforms continue to operate in countries such as Costa Rica.
According to the American Gaming Association, there are 85 countries where online gambling is legal. As of June 2010, some 665 companies, according to the organization, were operating more than 2,600 Internet gambling sites. Using data from the same year, the website states that nearly $30 billion was generated through online betting. Of that, less than 15 percent came from the U.S.
‘‘Online gambling is an inevitability. It’s just an old investigation on bookies,’’ Loeb added. ‘‘What will ultimately put these guys out of business — in the same way the lottery put away the numbers racket — is the federal government licensing, regulating and taxing online gambling.”
Loeb co-authored the book Blackjack and the Law with I. Nelson Rose and was one of the lawyers who represented several MIT students who were charged with card counting and later portrayed in the 2008 American heist movie ‘‘21.’’