Feds Quietly Confiscate Millions in US Customer Winnings

Posted on: December 5, 2016, 05:00h. 

Last updated on: December 5, 2016, 05:08h.

Casino.org Staff Writer Read More

Expertise: Commercial Gaming.

In June 2011, just months after Black Friday, when the US Department of Justice swooped on the world’s biggest online poker sites freezing accounts and indicting their owners, authorities struck another, far-less-publicized blow against offshore online gambling.

According to a report by the Seattle Post-Intelligencer this week, that month a Seattle-based US Secret Service taskforce intercepted $3.4 million from Thames Point Management, a UK company acting as an intermediary between payment processors on behalf of Betus.com.

Now, federal prosecutors in Seattle have asked a court for the right to confiscate $755,238, seized during an investigation against a separate but related company, Axia FX.

Follow the Money

No criminal charges have been brought in either case, nor have either of the companies in question sought to challenge the civil action initiated by federal prosecutors in seizing the funds. The money has been written off by the operators, it seems, as the cost of doing business.

The cases highlight how difficult it can be for unregulated, offshore sites to pay their customers’ winnings.

Deposits are comparatively simple. US customer deposits are paid by the customers themselves into accounts hosted by the sites or third-parties. For example, during the investigation into BetUS, an agent funded his account by Western Union check to a company in the Philippines.

Withdrawals, meanwhile, must be made by a gambling site via electronic transfer to a third-party so it appears “clean,” and from there it is wired to a customer’s bank account or mailed directly by check. 

According to court documents, investigators said that this necessity to disguise the transfer of funds into the US has “spawned a market for illegal money transmitting business” and both Axia and Thames Point are in the business of moving money in and out of the US.

Millions in Transit

Prosecutors said that Axia transferred at least $36.5 million in a single year, in what it is claimed were gambling transactions involving US citizens. The company trades more than $760 million worldwide annually.   

Investigators identified 16 American corporations they believe to be using Axia to move gambling money, while over a dozen US firms were probed during the Thames Point investigation.

Seven Seattle-area gamblers were interviewed during the investigation after receiving their withdrawals from BetUS.com, with each saying winnings had been delivered by Thames Point. All of the money seized was funds destined to be paid out to US gamblers.

BetUS is an industry-pioneering online sports book that suffered in the wake of the Unlawful Internet Gambling Enforcement Act 2006, which barred financial institutions from processing online gambling transactions for US citizens, forcing offshore sites to find alternative ways to pay out players.