[pags11]

DISCLAIMER: The following information is essentially an opinion which you may place a reasonable degree of reliance; but, such an opinion cannot be considered absolute. It is based on conversations that I had today with people in the offshore industry and you are free to either believe it or to disregard it. I prefer that Jonnyblaze not even read it as he clearly is not capable of forming an opinion on his own and obviously has no respect for those that I offer.

As ---- posted earlier today, the word around the offshore gaming industry is that Pinnacle was told by the United States Department of Justice to cease doing business in the US or face charges. The investigation that prompted this ultimatum is a direct result in the sting in New York City a couple of months ago when a major bookmaking operation was dismantled by the Queens District Attorney’s office. It seems that a significant part of this operation was actually local agents for offshore books that were managing their accounts locally while allowing their customers to place their wagers online. Pinnacle was apparently heavily involved with this gambling ring and when this came out in the investigation, the information was past on to the DOJ.

It is hardly a coincidence that the ultimatum was given to Pinnacle this week as this weekend, the NFL playoffs kick into high gear and the number and amount of NFL wagers historically are seen to increase sharply during this time leading up to the Super Bowl which is one of the most heavily wagered on events in the world. Pinnacle was not given an opportunity to implement this ban on US wagering and were in fact told to take it or leave it by this morning. With 20% of their business being based in Europe and another 20% originating from Asia, the Pinnacle management made a business decision and discontinued taking wagers from US based accounts. They have stated that they plan to promptly cash out these accounts and I guess we will see if that is indeed true.

Some posters at -------- have taken this action to mean that the offshore gambling industry is on its way out as far as US customers are concerned. The recent efforts by Congress and the DOJ clearly indicate that there are many within our government who want to put an end to online gambling. Several offshore books have responded to this by deciding that continuing to do business with US based bettors is simply not worth the risk of being prosecuted but until today, it has only been publicly traded companies that have made this decision. If the rumors about Pinnacle are true, then the reason they got out of the US is because they had been caught dealing in illegal gambling by having agents collect and payout wagers on American soil.

Placing a wager online with a company that is not located within the US Borders is not illegal in most states. To my knowledge, there is not one single federal law that makes it illegal to do so but a handful of states have recently passed legislation that does make this illegal. I personally only do business with foreign books who are licensed in the country where they are located and are privately owned. I also believe that while the industry is certainly volatile, the books with whom I do business have earned my trust and will continue to do business as they have for many years as they operate legally under the laws of their respective companies.

To date, I am only aware of one offshore gambling company that has ceased doing business with US customers and failed to refund the money in those accounts. BetOnSports had several subsidiary books under their corporate umbrella and since their CEO was charged with racketeering conspiracy, no progress has been made in this matter. All of the other gambling companies that have chosen not to accept wagers from the US have returned their customers’ funds and we are hearing now that Pinnacle has already begun to do so as well. I am not sure what all of the panic is about. I understand the disappointment of Pinnacle customers who had become accustomed to their discounted juice but what I have read sounds like they all feel somehow betrayed.

Each person has to make his own decision regarding how secure they feel about monies they have on deposit in a particular offshore book. Call the upper management of these books and talk to them, get to know them and ask questions. It might surprise you to learn that most really are regular guys and appreciate your business. If you are uncomfortable then it is foolish to leave large sums of money on deposit with them so either reduce your balance with periodic withdrawals or even limit your wagering to local books.

[pags11]

guys, the bottom line is that pinnacle should have been the last book standing...they obviously did something really ****ing wrong to be forced to shut down...they had to have known these guys were running bets illegally...

[pags11]

remember this?...

http://www.boston.com/business/artic...gs_24_charges/

By Tom Hays, Associated Press Writer | November 15, 2006

NEW YORK --More than two dozen people, including a professional baseball scout and a high-stakes poker player, were charged Wednesday in connection with a billion-dollar-a-year gambling ring that rivaled casino sports books.

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Sign up for: Globe Headlines e-mail | Breaking News Alerts The illegal betting scheme was orchestrated through a Web site called Playwithal.com, run by the poker player, James Giordano, 52, of Pine Crest, Fla., according to Police Commissioner Raymond Kelly and Queens District Attorney Richard Brown.

A break in the case came last year when investigators secretly hacked into a laptop computer that Giordano had left in a Long Island hotel while attending a wedding, police said. He was arrested early Wednesday by FBI agents who had to scale the walls of his fortess-like Florida compound.

Also arrested was Frank Falzarano, 52, of Seaford, on Long Island, identified by prosecutors as a scout for the Washington Nationals and a former scout for the San Francisco Giants. He allegedly was a top earner in a network of 2,000 bookies who took more than $3.3 billion in cash wagers since 2004 from tens of thousands of customers nationwide.

"This is the largest illegal gambling operation we have ever encountered," Kelly said at a news conference. "It rivals casinos for the amount of betting."

Though the gambling ring relied on a Web site, it was different from the online betting operations targeted by recent federal legislation. The scheme involved placing sports bets through bookies, who would assign bettors a secret code to track their wagers and monitor point spreads and results through the secured Web site. The bets were taken on all kinds of sports, including football, baseball, basketball, hockey, car racing, and golf.

The defendants allegedly laundered and stashed away "untold millions of dollars" using shell corporations and bank accounts in Central America, the Caribbean, Switzerland, Hong Kong and elsewhere, Brown said.

The prosecution is seeking the forfeiture of $500 million in assets, "among the largest such cases ever filed," Brown said.

A total of 27 people in New York, New Jersey, Florida and Nevada were charged with enterprise corruption, money laundering, promoting gambling and other counts. Giordano had waived extradition in Florida and was expected to be arraigned next week; prosecutors did not have the name of his lawyer.

Falzarano, who was ordered held on $500,000 bail after pleading not guilty, "looks forward to defending himself in court," defense attorney Peter Tomao said.

Charges also were brought against three companies that allegedly helped Giordano develop and secure the Web site: Primary Development Inc. of Farmingdale, N.Y., Prolexic Technologies Inc. of Hollywood, Fla., and Digital Networks SA Inc. of Davie, Fla.

Search warrants executed in several locations resulted in the seizure of gambling records, computers and hundreds of millions of dollars in property, some of it stashed in a secret room concealed by a bookshelf in the Manhattan home of one of the suspects.

The property includes four Manhattan condominiums, millions of dollars in cash, tens of thousands of dollars worth of casino chips from the Bellagio hotel in Las Vegas, jewelry, gold coins, and a football signed by the 1969 New York Jets following their Super Bowl victory. Also seized was original artwork by Peter Max and Salvador Dali.

Police launched the investigation last year after receiving a tip from a suspect in a separate organized crime probe. Over the next several months, detectives with computer expertise broke the code for the Web site and began electronic surveillance of the suspects.

Giordano "carried everything about the gambling enterprise on a laptop computer never let out of his sight, except when he left it at a hotel in Nassau County where he had returned this past June for a family wedding," Kelly said.

In the three hours that Giordano and his wife were at the wedding, investigators entered the hotel room with a warrant, found the laptop on a desk and made a digital copy of the hard drive without his knowledge, police said.

Giordano won a Texas Hold 'em tournament at the Bellagio worth nearly $100,000 earlier this year.

Associated Press Writer Ula Ilnytzky contributed to this report.

© Copyright 2006 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

[pags11]

pinnacle was invloved guys and the U.S. government had them by the balls...they were forced to make this decision...this is why they shut down without warning...

[pags11]

thoughts?...

[Dark Horse]

There's a story waiting to be written here. Start out in the past, back alleys with shady books and law enforcement going after them. End with the roles reversed: totally corrupt politicians and honorable Wall Street type bookmakers such as Pinnacle. Completely shade the lines about what is wrong and right. Hard-hitting, noir, planting of false evidence, etc.

[Dark Horse]

Going back. The story broke November 15th. That means the investigation had been in the works for quite some time before the election.

So if this is indeed connected to Pinnacle, that could mean that the worst is behind us. The wind is definitely blowing from another direction in Washington since the verdict against the Republicans last November. Going after bookmakers, in that case, would no longer be a priority.

Time will tell, but I'm optimistic.

[Arilou]

If this is true, it explains a lot. It also points something else out: Pinnacle is only pulling out because the USA government had a way to get to them. If Pinnacle were to remove said method of getting to them, say via a move to Antigua and a new set of banks that doesn't mind, they could reopen to everyone again and everything would go back to normal. The reason they had to do this now was that they were exposed and didn't have time to fix it, which they will do during the summer.

And of course, if Pinnacle goes away then a new Pinnacle will arise to take up their business model.

[Jay Edgar]

Thanks, Pags.

This makes some sense, even if it requires a dramatic lowering of one's estimation for Pinnacle.

This is the sentence that I am wondering two things about.

Originally Posted by pags11

It seems that a significant part of this operation was actually local agents for offshore books that were managing their accounts locally while allowing their customers to place their wagers online.

1. Why would this be necessary? Must be some pretty big customers, and must involve credit, no? Why would Pinnacle risk this? Takes 'catering to the big player' to a reckless and unnecessary extreme, you'd think.

2. Local agents for offshore books, plural?

[Tchocky]

Thanks for the info, Pags. I'm leaning towards your explanation. I think the DOJ had Pinny by the proverbial balls and they folded. I can understand Pinny's position to stay silent on this matter and not provide more information about their decision if they truly did have agents engaging in racketeering on American soil.

[jjgold]

Vegas guys got it done, Pinny was taking all the action away from Las Vegas so heads Corps who donate tons of money to Senators make a call and then Senators call Justice Dpt and its over

Real simple guys and that is what is going to happen with WSEX, Greek and Cris also

[pags11]

guys,

good thoughts here...pinnacle may have "turned their heads" to all of the action they were taking up there in New York, but someone in the company had to know what the hell was going on...you don't take $250,000 a day in action from basically the same IP address everyday, that's something a company should be more aware of...it did always scare me that there seemed to be so many agents in the U.S. trying to get everyone to sign up with credit accounts...I'd like to hear Bill and John's thoughts on this...

[SBR_John]

Thanks Pags.

Give me a little bit to think about that.

[The Judge]

LMAO! I came here to get some additional background about what happened at Pinnacle and found my post from another forum posted here by Pags11.

[moses millsap]

Originally Posted by The Judge

LMAO! I came here to get some additional background about what happened at Pinnacle and found my post from another forum posted here by Pags11.

I think most here would have come to the conclusion that the first post was a cut and paste job anyways.

[The Judge]

Originally Posted by OWNED

I think most here would have come to the conclusion that the first post was a cut and paste job anyways.

I did not mean to insinuate otherwise. My post was regarding the irony of coming here to look for more to this story and finding my own words posted.

[bside]

So I take it then if you wrote that explanantion and were coming here looking for an explanation then yours is just a wild ass guess too? No offense - its a far more interesting theory than mine. I always just assume you can follow the money to the reason...and the money says their pressure from banks is probably the likely culprit. The government doesn't work fast enough to put the squeeze play on from a bust less than two months ago. And if they had enough to go after Pinny they still would regardless of some drop dead date. If there were/are assets they could seize they would. If not it does them no good to spend a ton of money trying to build a case against an offshore casino. Unless of course Pinny is a front for Al Qaida?

[Chuck Sims]

I had already come to the conclussion that Pinnacle was forced to "voluntary" leave the U.S. market. If it was truly voluntary they would of waited until after the super bowl, not 2 days before the division playoffs.

[pags11]

exactly chuck, and since this was such a big bust and if pinny was involved I see how the DOJ had them by the balls...

[Chuck Sims]

Sickening to think our tax dollars is paying law enforcement to do a lengthy and costly investigation to shut down Pinnacle from U.S. customers.

Some Pinnacle customers are now going to find their way to crooked books like BetUS...BetRoyal...SBG Global.

[SBR_John]

It is a good speculative theory Judge.

The part I very much doubt is the heart of the story. You suggest the feds came to them and basically said get out now and you support that with the timing and other possibilities such as recent gambling related arrests.

Where the theory fails in my opinion is that is not how the Feds conduct business. I highly doubt the Feds would make that deal or even contact any principals of Pinnacle until either a grand jury was formed or an indictment was unsealed.

Now it could be Pinnacle learned of an investigation or learned they were being ratted out or highly suspected the same. But not possible at all that a US Attorney would call them up and say boys, you need to shut her down or we are going to have to get out the belt.

[pags11]

sbrjohn,

I really don't think this hypothesis is all that crazy...the feds could have easily said, give us the info. we need about how much these guys were betting, who they were, etc. AND get the **** out of the U.S. market and we won't bring your name into this...

as Bill stated earlier, Pinny is and was very concerned about their reputation (especially in the non-U.S. markets)...something like this coming out could have really tarnished their image (associating with known criminals)...I'm not sure of the exact details, but this theory, above all others I've heard seems to make the most sense...I don't think you can really argue that...

[Chuck Sims]

I thinks its plausible. Can anyone think of a good reason that Pinnacle would shut it down two days before the division playoffs? Pinnacle was forced.

If not, why not make an announcement that they would shut off U.S bettors after the super bowl? This way you would have an orderly WD process. Some would get out immediately, others would wait until later.

[Chuck Sims]

Who's to say Pinnacle did not approach the feds first and asked them what they could do to avoid a criminal complaint.

[moses millsap]

Chuck - I agree it could be possible, but I think this scenario described by John is more likely

Originally Posted by SBR_John

Now it could be Pinnacle learned of an investigation or learned they were being ratted out or highly suspected the same.

[nosuzieno]

My buddy the local with his 10% vig laid off much at Pinny with guaranteed profit.

U.S. only non-muslim country that makes gambling illegal.

[BuddyBear]

Nice write up Pags....

[bside]

If the historical information listed in this article is accurate, than I am surprised anyone still takes bets from US players. Seems like they will get you regardless of what country you do business in.

http://www.bettingmarket.com/dojwar50021.htm

[JoshW]

Pinnacle certainly had a huge network of agents in the US. If that hadn't been the case, I am guessing they still might be able to take bets from individual US citizens without worrying about too much heat.

[RickySteve]

Originally Posted by nosuzieno

U.S. only non-muslim country that makes gambling illegal.

Gambling is legal in 48 states. It depends who's profiting as to whether a specific wager is morally acceptable.

50% hold on the lottery? Pour in your life savings!

25% hold on slots? Don't stop pumping in those coins!

1% hold on an NFL game? You're a worthless fuucking degenerate!

[The Judge]

Originally Posted by SBR_John

It is a good speculative theory Judge.

The part I very much doubt is the heart of the story. You suggest the feds came to them and basically said get out now and you support that with the timing and other possibilities such as recent gambling related arrests.

Where the theory fails in my opinion is that is not how the Feds conduct business. I highly doubt the Feds would make that deal or even contact any principals of Pinnacle until either a grand jury was formed or an indictment was unsealed.

Now it could be Pinnacle learned of an investigation or learned they were being ratted out or highly suspected the same. But not possible at all that a US Attorney would call them up and say boys, you need to shut her down or we are going to have to get out the belt.

As I alluded to in the "disclaimer" portion of my original post, this story was related to me by the General Manager of one of your A+ rated books after he had spoken with Pinnacle's CFO. He also told me that that he did not have the complete story and that we would probably never hear all of what went down but that Pinnacle absolutely did not shut out US customers on their own accord.

I have never really known who the actual owners of Pinnacle are but I have also heard in the past couple of days that "he" is a US resident which would certainly have an impact if "he" was being pressured or even interviewed by the DOJ. This part is admittedly heresay while the rest of the story is told here as it was related to me.

[pags11]

buddy,

thanks...

excellent info. here judge...I believe this story to be true...

[Starion]

I have a theory as to why the feds are so down on gambling that I don't think I've seen addressed yet. If you notice in previous discussions as to how people felt comfortable letting sportsbooks hold $50K+. Think about that for a minute....... That means they're using sportsbooks as bank accounts basically and we all know the US GOVT hates offshore bank accounts. I read somewhere that if you want to guarantee an IRS audit, just check the box on your tax return that you have an offshore account with more than $10k The idea that they're missing tax revenue due to people hiding money there is a huge factor.

I'm willing to guarantee FINCEN is watching to see where the large movements of money go from Pinnacle. I'm not saying 99% of us have anything to be concerned about, but there are those that probably should be. You may call me crazy or paranoid.......but I may be more accurate than most of you want to believe.

[mad]

Sounds like quite a reasonable theory you have there, Starion. However if i have a enormous Pinnacle balance, you can be sure that it won't be returning to any account that can be directly or indirectly linked to me.

[JELLYBEAN]

IT's was basically a way to clean house. To many agents had clients pinny didnt want. Throw in that there was some heat, and it's an easy decision. Credit will always be a part of this business....and pinny is not out of business read between the lines boys...all you theory's are fun to read..but the real reason is a simple as it gets.