David v. Goliath – Round One

David v. Goliath – Round One 150 150 Chris Rabalais

In a world of liars, sellouts, short-term thinking and greed, every once in a while something amazing happens…

For more than a decade, and even more so in the last 8 months since the foolish U.S. Supreme Court decision removing the Federal prohibition of sports gambling on which we filed a brief, I’ve had to deal with the constant drumbeat of the inevitability of a world destroyed by the cancer of sports gambling. This includes fatalistic remarks about the size of the market players, how much money was behind this and the public’s appetite for this deadly poison. It became a constant drag on top of everything else I had to deal with to continue to propel our mission forward. Some of these comments came from the staunchest supporters of our enterprise. To say this was/is tiring is an understatement. In spite of all that, I never moved a millimeter off the mark.

We have been very vocal about the enforcement of existing laws and have made every attempt to keep within the rules and even get ahead of them in spite of watching daily fantasy sports, sports gambling and others break them without any seeming repercussions. They just brought in more liars… I mean lawyers and buckets of cash to bribe the next group of simulated public officials to do their evil bidding. It seemed to be working.

…then everything changed a few weeks ago and it shocked everyone including me.

The principal Federal law being ignored was the 1961 Wire Act. Basically, this prohibits the transmission of gambling transactions and the associated money across state lines. It was designed to keep this garbage in the middle of the desert where it belongs. It was being ignored and we started speaking about it publicly then the chatter began. A stream of stories began to appear attempting to undermine the law and they ranged from flat-out deceptions to comical spin on the truth.

Then out of nowhere… and I mean OUT OF NOWHERE… a legal opinion surfaced a few weeks ago, which restated the Wire Act in the broadest possible terms. It said categorically that online sports gambling in ALL FORMS is illegal at the Federal level. For all you “states’ rights” people, the Constitution of the United States clearly states that Federal power supersedes state powers on covered subject matter. The real teeth of this law is control over the national banking system. As we have said in our comments and coverage, you CAN NOT localize the money inside state lines and that is especially true in today’s cloud computing based world.  This change affects the money flow and it is fatal. You can expect the national banks to quickly walk away from anything that conflicts with this change in the law. Before you say that the banks will “want the money”, I assure you that their national banking licenses are more important than the trickle of online gambling flows. To cross swords with the regulators is an existential threat they will not want to risk.  You can read the opinion here.

We see you as the same threat as MS-13!

As if this were not surprising enough, the enforcement memo that follows is even more shocking. Rather than sending a nice letter in the mail, they have 90 days to cease or deal with the U.S. Department of Justice Criminal Division Organized Crime and Gang Enforcement Unit. Those are the people with the machine guns, battering rams and armored vehicles. Read the memo here and their press page is here. I think it fits. The public did not ask for online gambling and the law breaking must come to an end. If this does not make the statement, I do not know what will.

In a strange irony, Las Vegas gambling promoter Sheldon Adelson was behind the march to enforce The Wire Act. This was certainly not based on any high-minded intention. If that were the case, he would not be in the gambling business in the first place. This is purely a greedy protectionist move to keep all the lying and stealing in Vegas… and yet another case of an “enemy” being used to further our cause without realizing it. It seems that I read that in a book somewhere…

No matter what kind of slant is put on this, this is an extremely bad day for the online gambling rip-off artists and a very good day for our nation in general. It also creates an extraordinary opportunity for us to push our sports investing concept and platform ahead rapidly. Nothing like having your opponents blown to pieces with nuclear weapons right before your eyes. Now, I am certain that court challenges are forthcoming that will take years to sort out. In the interim, you have less than 90 days (and probably FAR less) before the banks start unplugging. Oh… and do not forget about those people in the picture above. That is your welcoming party if you decide to ignore this.

The moral of the story: Do what is right and stick to your values no matter what. The payoff will come.