The History Of Legendz Sports

The History Of Legendz Sports

In light of the recent sentencing of Bartice “Luke” King, a former bartender that started an illegal sports betting ring, it is worth exploring the federal laws that govern legal sports betting in the US.

The History Of Legendz Sports

Bartice King, who is a Spring, TX resident, began his sports betting operation in 2002. At that time, the company was known as MVP Sports and was opened in San Jose, Costa Rica. By the following year, King had changed the name of the business to Legendz Sports and moved operations to Panama. In April 2013, after nearly a decade of investigating by the FBI and State of Oklahoma, over 34 individuals and 23 outside organizations for their participation in running the business. These individuals were categorized as runners, bookies, agents, and/or payment processors.

The operation had made over $1 billion in its 10 years in the online gaming industry. The charges brought against King and his protégés included racketeering, conspiring to commit money laundering, money laundering, and operating an illegal gambling business. In a press release issued by the FBI, Acting Assistant Attorney General Mythili Raman had the following to say regarding the actions of the defendants.

“Today’s charges demonstrate that we are as determined as ever to hold accountable those involved in facilitating illegal online gambling by U.S. citizens, regardless of where the business operates or where the defendants reside.”

The Final Verdict

On Thursday, May 11th, 2017, King was the last of the defendants to get sentenced. There was a two-year gap between King’s conviction and his sentencing due to discrepancies regarding how much of a fine would be imposed. Rather than the suggested $222 mil recommended by prosecutors, US Western District of Oklahoma Judge Stephen Friot decided on $12.6 mil based on the actual income made from the illegal betting operation. Instead of giving King the maximum 41 months in prison for his involvement, Friot opted to give the former CEO 5 years of probation with the first five months under house arrest.

What This Says About Federal Sports Betting Laws

This case serves as a prime example of how federal sports betting laws in the United States are aimed at operators rather than individual bettors. There were 57 indictments during this case, all of which were against individuals associated with Legendz Sports or those that has business connections with the entity. There was no focus on the US or overseas bettors that were using the site. Take a look at this quote from Jim Finch of the FBI’s Oklahoma City Field Office regarding the initial investigation.

“Individuals cannot skirt the laws of the United States by setting up illegal internet gambling operations in a foreign country, while living in the United States and enjoying all the benefits of U.S. citizens.”

This is similar to what Raman said earlier regarding facilitating the placement of bets using the internet in the United States. The key word is “facilitating”, and can be traced directly back to the federal Wire Act of 1961. The law states that, “whoever being engaged in the business of betting… knowingly uses a wire communication facility for the transmission in interstate or foreign commerce of bets… on any sporting event or contest, or for the transmission of a wire communication which entitles the recipient to receive money or credit as a result of bets or wagers… shall be fined under this title or imprisoned…”

Being that the Wire Act does apply to the internet and the operators of the site were residing in the United States, this conduct would seem to be in violation of the law. Another federal law that targets gambling businesses in the US is the Unlawful Internet Gaming and Enforcement Act of 2006. Though this does not make online gambling itself illegal, it does stop gambling businesses and most notably, payment processors, from knowingly accepting payments that are related to online gambling. A number of those prosecuted in the case were the payment processors that handled the wagering transactions that were taking place.

How The Case Shows Changing Attitudes Toward Legal Sports Betting

Though King spent 4 months in jail after his initial conviction before posting his $1 million bail, Judge Friot could have extended a much harsher sentence the defendants. Instead, he actually quoted a letter from a jury foreman when justifying why he did not to impose prison time for all parties involved.

“The way I look at it, with all the “legal” sports gambling that goes on the U.S., coupled with the fact that no one was physically harmed and nobody was forced to place bets, I see no threat to society by allowing both… to avoid prison time... I strongly support some sort of deferred sentence or probation.”

The legal sports gambling most likely refers to the offshore online sportsbooks that US bettors use every day. These sites are owned and operated outside of the United States, which is why they are not subject to the same restrictions. King was and still is a US resident.

The judge also made it no secret that he felt the government acted irrationally and ignored the facts when it came to investigating and prosecuting the case. John Han, an attorney from the US Department of Justice that assisted with the case, was named specifically for unprofessional conduct.

Friot’s actions and overall opinion show that at least some sides of the law see that sports betting is not the dangerous and harmful activity that it used to be during perhaps the 50’s. Times have changed and regulating sports betting in the United States would permit more legal US online sportsbooks, therefore stopping illegal operations like these from opening in the first place.

This paired with the fact the US Supreme Court may hear New Jersey’s sports betting case definitely gives hope that the legal sports betting climate is starting to look more favorable for USA online sportsbooks.