In years past, sports gambling was often associated with seedy characters involved in organized crime where weekly settlements occurred in person, and could involve violence for failure to pay a gambling debt. There was also a concern this type of violent behavior could influence the outcome of sporting events. As a result, a number of laws were enacted in the 1950s and aggressive prosecutions arose to shut down this activity.
In spite of these laws and prosecutions, sports wagering has not disappeared. In fact, it has grown as an industry with more and more states legalizing it under their regulatory authority.
Despite this widespread acceptance of sports betting, there are still criminal prosecutions that arise from sports gambling. The vast majority of these prosecutions involve individuals operating gambling businesses outside the scope of regulation of their local authority. If you are not a regulated gambling entity, you almost certainly would be considered to be involved in criminal activity. The primary avenues the government utilizes in prosecuting these cases are through the charges of tax evasion, wire fraud and money laundering.
Illegal Sports Gambling and Tax Evasion
Tax Evasion – Tax laws for regulated and legally operated gambling businesses are complicated. This is not the typical source of a gambling tax evasion investigation. Usually, criminal tax evasion cases involving gambling involve the “bookie” or owner of an unregistered gambling operation failing to claim taxes on his gambling profits. Such failure to list these profits on tax returns can result in arrest for tax evasion. This is the most common form of criminal prosecution in a gambling case.
Wire Fraud – The “Wire Act” criminalizes the use of the internet, phone or fax lines, and other forms of wire transfers to conduct any illegal gambling operation. In other words, if you are operating a gambling business in a state where sports betting is illegal (even if only a misdemeanor) you can be guilty of felony wire fraud if payment or wagering is made using the internet or other wire. In our modern society, it is likely that all gambling operations involve the use of federal wires in some manner to implicate the Wire Act.
Money Laundering – Finally, prosecutors also often bring “money laundering” charges against illegal gambling operations. Federal money laundering statutes make it a crime try to legitimize illegally obtained funds in an effort to hide the criminal source of those funds. In other words, it is illegal to take dirty money and try to clean it through a legitimate business or transaction. It is also common for the government to seek forfeiture of laundered proceeds. In other words, the government will seize all of the money laundered and request the Court Order the funds be forfeited entirely to the government.
If you are under investigation for involvement in illegal sports gambling, or have in questions in Alabama about this topic, call the sports gambling attorneys at Boles Holmes White LLC for legal assistance.
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