Wednesday, August 28, 2013

Florida Internet Gambling Crackdown Continues as Deals Reached in Allied Veterans Case

Florida's internet-gambling world remains suspended amid uncertainty as state prosecution efforts continue against major public figures connected to a $300 million gambling scheme run through a chain of the state's authorized "charitable gaming" outlets.

The fallout from April's Allied Veterans scandal continues as the group's national commander, Jerry Bass, pled guilty to two counts of the more than 200 charges originally filed against him.  Bass joins at least two other defendants among the 57 in the case in reaching a deal with prosecutors.  John Hessong and Johnny Duncan, the latter a former commander of the Allied operation, previously reached deals in exchange for lenient sentencing.

Prosecutors' efforts remain focused on the alleged "mastermind" of the scheme, Jacksonville attorney Kelly Mathis, who is alleged to have billed a higher-than-normal counsel rate for his ongoing services to Allied as a way to disguise the depth of his relationship with the group.  Allied sent only 2% of the roughly $300 in gross revenue it garnered to charitable veterans groups. (That's a similar rate to the 3% rate CNN recently reported for the Kids Wish Network in a look at America's worst charities.)

Mathis appears dedicated to the legal battle.  Unlike some of the other Allied defendants,
Mathis and his own attorney have moved to have the charges dismissed.  Despite records showing that Mathis had far more than normal legal duties, including helping draft Allied's business plan and helping select many of the group's storefront and strip-mall locations, Mathis continues to maintain he did nothing illegal.  "Their case is falling apart," Mathis told the Orlando Sentinel about prosecutors' efforts against him.

One thing that the Allied case has caused is a chilling effect against all forms of internet gambling throughout the state.  Since many of Allied's games, along with those available in other of the state's "internet cafes," make use of the internet to generate the games being played, a new state law rushed through by the Florida legislator contains overly broad language that could be interpreted to make any computerized device used in connection with any sort of gaming illegal under Florida law.

That sweep extends to online poker, fantasy sports, and many other recreational outlets.  I received a letter from a reader a few weeks back complaining that, "Florida made the internet illegal!"  That's not quite true, but not far from it, at that... and it has had repercussions in the poker world.

For instance, ClubWPT and SkillBet, two subscription-based poker sites which had provided their services to Florida residents, quickly pulled out of the state after the new law was passed a few months ago.

Another new subscription startup,, decided not to mess with Florida to start with.  LiveAce, which has implemented all sorts of gimmicks in its attempt to keep its online poker product under the purview of various states' sweepstakes laws (it technically doesn't cost anything to play, though you'll be at a disadvantage to those who do subscribe), crossed Florida off its list of 31 states plus the District of Columbia, where it is available.  LiveAce also isn't available right now in KAP's home of Georgia (availability map).

Florida's likely to remain bottled down for quite some time, in Internet gambling terms.  If there's one thing the Allied scandal has done, it's to put the state into a reactive political mode.  It'll be quite some time before the state seriously considers online gambling -- and maybe only online poker at that, several years down the road -- whereas a year or two back, it was among the topics being discussed amid the state's general gambling expansions elsewhere.  No longer.

1 comment:

Rodney Ness said...

With the advancement of technology nowadays i am not surprise that online casinos are becoming a hit.