Feds hit online gambling where it hurts the most - the money

Arresting online gambling executives and creating laws targeting Internet gambling proved unsuccessful for the U.S. Government, hence the new tactic - seizing money related to online gambling operations. As previously reported, the Feds have seized $24 million from bank accounts tied to online gambling company Bodog, an act which will certainly ripple through the industry. The amount, although a drop in the ocean compared to the online gambling industry's turnover, is indeed big enough to make the owners of the money cringe. The outcome of the seizure and the effects it will have on the Internet gambling industry is yet to be seen, but from the actions taken by the Feds in the past few months one thing is for sure - the line of fire has changed. Arrests of CEOs of Internet gambling companies seem to come and go without much effect on the remaining players in the market. But money seizures, now that's something everyone could relate to. The seizure will also result in delayed withdrawals and increased numbers of bounced checks.

Is the arrest of former Bodog owner Calvin Ayre imminent? It's possible, even if the Feds only use a trial of Ayre as an online gambling witch-hunt. But there is one point overlooked, which forces the U.S. Government to go after the money, rather than the Internet gambling website - the new owners. Earlier this year the ownership of Bodog was taken over by Morris Mohawk Gaming Group. The Morris Mohawk Gaming Group is located in the territory of Kahnawake just outside Montreal, Quebec, Canada, and is licensed by the Kahnawake Gaming Commission to offer gaming services from Kahnawake to users worldwide. According to their website, Bodog has entered into a license agreement with the Morris Mohawk Gaming Group to allow this group to use various elements of the Bodog brand within North America to support the Morris Mohawk Gaming Group's marketing activities. Morris Mohawk Gaming Group is led by Olympic Gold medalist, Order of Canada recipient and First Nations' leader Alwyn Morris. And there is nothing the U.S. Government could do against an Indian tribe, especially in another country. The Feds will get zero support from the Canadian government, ever since the Oka Crisis, in which the Mohawk community of Kanesatake took arms to fight the authorities. There is a good reason Kahnawake is the hot spot for online gambling companies targeting U.S. players.

Considering the above, no action can be taken against the current owners of Bodog, hence the money trail is the only option the Feds could track. Only time will tell if it would be a success, but one thing is certain - there is more money to be seized in the upcoming months.

Published on 07/31/2008