Gaming Scandals and Bankruptcies in 2015: Sports and Gambling’s Megastories of the Year
Posted on: December 27, 2015, 09:00h.
Last updated on: November 5, 2015, 09:33h.
Ah yes, gaming scandals and bankruptcies. Why must this be a category in gambling news at the end of every year?
Because, unfortunately, bankruptcies and scandals are seemingly inevitable in a high-stakes world where fortunes are won and lost in a matter of seconds.
2015 was not immune to scandalous news, including a whopper involving widespread corruption at FIFA; a multi-million dollar lawsuit against a star poker player who was accused of cheating; a longtime poker magazine closing up shop; one of golf’s best players accused of involvement in an illegal gambling ring; and an alleged insider trading case that may alter the landscape of daily fantasy sports forever.
But let’s start at the top.
FIFA Gets Kicked
Match-fixing in soccer at the ground level happens all the time. But alleged fixing of World Cups is an entirely different ball game.
This summer, key officials within FIFA, professional soccer’s governing body, were rounded up by the Department of Justice (DoJ) and charged with widespread, systemic corruption. The charges included fraud, money laundering, and bribery. In all, the DoJ, aided by an investigation by the FBI, indicted 14 top-level FIFA employees, all while FIFA’s President Sepp Blatter somehow avoided prosecution (although he was briefly suspended).
Blatter and FIFA, however, are far from in the clear as US authorities continue their investigation and build their case. They have recently been joined by UK investigators as well, who have opened their own probe into Blatter and FIFA.
The alleged violations by FIFA date back as far as two decades, but more recently the Justice Department’s investigation revealed bribery attempts surrounding past and future World Cup bids. And considering the World Cup is the richest sporting event every year it’s played, the long history of alleged bribes have added up to making this possibly one of the biggest scandals to ever hit professional sports.
Mickelson Hits a Hazard
Sports had one other scandal this year when, also this summer, superstar golfer and five-time major winner Phil Mickelson was linked to an illegal offshore gambling operation. Court documents allege the operation was run by a 56-year-old bookie who has already plead guilty and claims to have laundered nearly $3 million into the US for an unnamed client, who ESPN’s Outside The Lines reported was Mickelson.
The ace golfer, who has spoken openly over the years about his propensity to gamble on non-golf sporting events, has denied the allegations and is not currently under investigation. The case, however, is still pending.
Ivey Over the Edge
Moving to another guy who loves to gamble: Phil Ivey. The 10-time World Series of Poker bracelet winner and arguably one of the greatest players of all-time is facing a whale of lawsuit by the Borgata Casino in Atlantic City for $9.6 million after allegedly cheating the casino out of millions during a multiple baccarat sessions in 2012.
The Borgata’s suit, which Ivey has said publicly, “I’m gonna win,” alleged that the felt superstar hatched a scheme to use an edge sorting technique of spotting variations on the back of the cards, thus being able to predict what was being dealt.
The lawsuit also alleges Ivey even made special arrangements for the game, which Borgata agreed to, on the basis he was superstitious, but that really created an unfair advantage for him.
Not helping matters in Ivey’s case is that he’s currently caught up in a similar lawsuit across the pond in which Crockfords Casino withheld nearly $12 million he won playing another form of baccarat. Ivey is the one suing this time, to get his money back. And like Borgata, Crockfords says the “edge sorting” method was used, as well.
Fantasy Sports Hits the Wall
The final big scandal of 2015 belongs to the daily fantasy sports (DFS) world, which was cruising along legally and regulation-free until news broke that a DraftKings employee used inside information to win $350,000 on rival site FanDuels.
When it was exposed, everyone from feared federal prosecutor Preet Bharara (of poker’s Black Friday fame) to Congress got involved to determine whether the sites were violating federal law. Amid the sudden concerns among players of DFS, the sites reported their lowest week of participation yet in late October.
Caesars Holds Court, and Not in a Good Way
Caesars Entertainment‘s bankruptcy drama in 2015 was major and ongoing. Embroiled in the kind of complex financial restructuring that is meant to preserve a business but that often leaves its employees by the wayside, Caesars drew ire and criticism this year when it reportedly deprived 279 current and former Caesars executives and directors some $78.6 million because of a deferred compensation program.
A reported 15,000 note holders of various sorts were left waiting for whatever piece of the pie the courts and the restructuring will utimately throw at them, but it seems unlikely that any of the deferred payment will ever be seen by said execs. We are guessing the lawyers will make out the best in this situation, as is often the case in protracted legal battles over money.
Not quite as grand a breakdown, but BLUFF Magazine also hit the skids in 2015. A longtime member of the poker community, BLUFF, founded in 2004, shut down the print version of the magazine a few years ago after it was acquired by Churchill Downs, Inc. and switched a lot of the focus to coverage of the online poker world.
But earlier this year, the magazine shuttered the digital operation as well and let go of all of its staff, ending a run of, at one time, one of the world’s largest gaming periodicals.
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