With gaming still not legal in the Cotton State, a new article says that there is an illegal sports betting crackdown afoot in the state. Per a recent report from AL.com, several properties in a portion of Trussville’s downtown entertainment district are listed in a 114-count indictment surrounding an illegal sports betting operation. According to the article and other sources, federal prosecutors called this an illegal sports betting organization that raked in “hundreds of millions in collected gambling debts over several years.” In fact, earlier this January, a federal grand jury indicted 11 men – including six from Alabama – on charges that the organization they managed evaded tens of millions of dollars in taxes for three years.
In this article, SBS will be going over the latest news coming out of Alabama and also some more thoughts about gaming in the Cotton State.
As referenced in the article from AL.com, the 56-page indictment makes for interesting reading, as prosecutors detailed an organized group for collecting gambling debts and evading detection by authorities. Federal officials say Timothy J. Pughsley, 51, of Birmingham began operating a bookmaking business about 17 years ago. This organization would later go on to be known as “Red44.” According to the article, bookmaking and betting activities for the organization occurred online through an offshore server located in Costa Rica. Prosecutors in the case are charging that Red44 operated as a multi-level marketing operation. Bettors here generally placed bets on credit, with no money, exchanged online.
Per sources, the platform at Red44 tracked everything from odds to earnings to outstanding debts. Bookmakers here were charged a per-head fee for each active bettor account and most of the action occurred during college football season. In the case of Pughsley, 30 pieces of real estate property are listed at addresses in Alabama ranging from Trussville and Pelham to Birmingham. Two of the properties listed in the indictment are inside the Trussville Entertainment District or TED and owned by a local businessman, Coby Lake. Lake’s attorney says that Pughsley was a passive investor without any operating authority over the properties.
According to the same article from AL.com, at an August 2019 conference in Chicago, Pughsley told participants during the previous fiscal year, the group had a roster of more than 15,000. He did note though that about 7,800 bettors came during one week of the college football season. The average loss per bettor was $983 according to the indictment. In terms of revenue numbers, prosecutors say that Red44 as an organization, earned a gross profit of $14.9 million that year. Per financial reporting methods, this would have generated an excise tax of about $6.8 million. The same article notes that the organization also estimated bringing in bets estimated at $300 million in wagers, resulting in $6 million in excise taxes, and then by 2021, this number grew to $352 million in wagers.
As the article notes, participants at these gaming conferences also were given marketing t-shirts and then were instructed on how to skirt tax laws when filing as well. Moreover, the report notes how betting participants were told to identify themselves as self-employed and when using Venmo, to use certain phrases when collecting wagers. It was also stated in the article from AL.com that one defendant told participants that Red44 was “not in the business of breaking kneecaps” to collect debts, but “used intimidation over the phone” to ensure money was paid.
Once you are all wrapped up getting the latest news from Alabama, SBS has a ton more where that came from with a bunch of resources on our website. If you need more information regarding the state and topic at hand, our sports betting in Alabama guide is here to answer a lot of your questions. Another great page to always have your pulse on is the SBS best bonus betting sites rundown which details tips for getting the most out of promotions. As many regular readers of this space are aware, this page features a catalog of the latest welcome bonus offers. Finally, an always helpful tool to familiarize yourself with is the SBS payment methods overview. Here you can find a variety of different ways to make deposits and withdrawals from crypto to more traditional banking routes.