The concept of “bad actors” has been part and parcel to casino and gaming worlds since their inception, and the fight to keep these industries clean can be an ongoing struggle. In 2017, we saw powerful online gaming executives, rising social media stars, and nefarious gamblers having to pay the piper for their efforts to achieve ill-gotten gains.
The successful prosecution of two YouTubers on charges of promoting and facilitating underage gambling with the use of in-game virtual items was a first in 2017. The UK Gambling Commission secured convictions against Craig “NepentheZ” Douglas and Dylan Rigby in January.
The YouTube stars, who also owned the now-defunct FIFA-coin gambling site FUT Galaxy, had a collective following of more than 1.6 million subscribers, many of whom were underage videogame players. The court saw footage of a 12-year-old boy gambling on FUT Galaxy at the encouragement of Douglas and Rigby on YouTube.
The pair was found guilty of violating the UK Gambling Act 2005 and fined a total of £265,000 ($332,000) for their efforts to promote gambling activities through the sale of in-game virtual items.
Billy Walters’ Big Fall
Legendary Vegas sports bettor Billy Walters also found himself in the dock this year, accused of profiting from illegal trades on Dean Foods stock, using information provided by ex-Dean Foods chairman Tom Davis.
In July, the 71-year-old Walters was found guilty of making “at least $43 million” from insider trading in a trial that entangled golf star Phil Mickelson.
Mickelson, who was not accused of any wrongdoing, agreed to repay the $1 million he made on Dean Foods stock after following Walters’ tips.
In September, he was sentenced to five years in prison and ordered to pay a $25.4 million fine.
Tom Davis, Degenerate Gambling
Davis, who testified against Walters as part of a plea bargain with federal prosecutors, also proved himself to be a bona fide bad boy of gaming.
He admitted he borrowed almost $1 million from Walters under the pretext of investing in a Texas bank, but confessed to the court that he had spent it instead on gambling and hookers, including blowing $200,000 on one hand of blackjack in 2011 at the Cosmopolitan in Las Vegas. He lost.
The Dean Foods honcho and chairman of one of America’s biggest milk-processing companies also confessed to embezzling $100,000 from a golf charity for battered women to fund his gambling habits.
Davis told the court that Walters’ requests for information became “more demanding,” after he became indebted to him. In October, he was sentenced to two years in prison.
David Baazov on Trial
David Baazov, founder and ousted CEO of Amaya Gaming, went on trial earlier this month for financial crimes related to his company’s $4.9 billion acquisition of PokerStars in 2014. It was a coup that transformed his company into one of the biggest online gambling firms in the world, and embroiled him in one of the biggest insider trading scandals in Canadian history.
But was it “his” company at all?
Documents released by the Quebec financial regulator AMF as part of its case against Baazov suggested that he was never the majority shareholder of Amaya. Rather, he was a minority shareholder acting as a nominee, holding as much as 75 percent of Amaya on behalf of his brother, Josh, and their long-time business partner Craig Levett.
Thanks to a previous conviction in the US for telemarketing fraud, a black mark that could have jeopardized Amaya’s (and PokerStars’) gambling licenses across the globe, Josh Baazov plausibly had a reason to hide his ownership.
David Baazov, meanwhile, has vowed to vigorously contest all charges against him
Amaya changed its name to The Stars Group this year, partly to distance itself from the charges of securities fraud levelled in 2016 against its former chairman and CEO, who if found guilty will face significant fines and prison time.