Illegal US Online Sportsbook Shut Down

Of all forms of online gambling in the US, lawmakers go after sports betting the most. The reason for this can be traced back to a law called the Wire Act of 1961 which prohibits placing sports bets via “wire communication”. This old law is used to support the idea that online sports betting in the US is illegal, even though the internet did not even exist when the Wire Act was written. This is an important distinction since internet gambling in general is not actually illegal in the US, but only heavily discouraged.

This sets the stage for news that just surfaced of a Kansas City man who on Wednesday plead guilty to operating an online sportsbook in the USA. Michael Badalucco, 26, ran an underground website that channeled bets through a maze of computers all across the US before finally ending up in Costa Rica with a legal sports betting operation there.

Because the US government tries to find ways to keep players from gambling online, they make it very difficult for US players to fund their online gambling accounts. To circumvent this issue, Badalucco collected cash from his clients, and paid them in person once every week.

When caught, Badalucco waived his right to a grand jury review and pleaded guilty immediately. In return, prosecutors agreed not to ask him to act as a witness in trials to implicate others in his business.

Badalucco now faces a maximum sentence of two years in prison, though it is likely that his actual sentence will be under a year.

The case against Badalucco is the first charge to result from a long-running probe into illegal gambling websites operating out of the US. Meanwhile, many players avoid trouble by simply playing at foreign-hosted internet casinos and sportsbooks, which cannot be shut down by US authorities.