Gambling Site Bodog Shut Amid Ongoing Crackdown
By ALEXANDRA BERZON And WILL CONNORS
U.S. prosecutors netted one of their biggest prizes in their crackdown of online gambling, shutting the website Bodog.com, which had built up a business by brazenly advertising itself on billboards and TV, thumbing its nose at regulators.The Justice Department also indicted Canadian Calvin Ayre, the company's high profile, globe-trotting founder, and three others associated with the business. The four men are all out of the country and no one has been arrested.
Bodog, which operated a website from outside of the U.S., took bets for professional and college sports among other types of gambling. It advertised its services openly on billboards, magazines and in TV ads in the U.S. until authorities began to crack down in 2008.
The U.S. Attorney in Maryland charged Bodog with operating an illegal online sports-betting business, which it said violates Maryland laws. The company also laundered money by moving funds from outside the U.S. to gamblers and advertisers, the Justice Department said.
The company paid at least around $100 million in winnings to gamblers, according to the government.
Mr. Ayre, 50 years old, began Bodog in 1994 with $10,000 and built it into a well-known business that in 2006 he later said took in revenue of $320 million, with a 25% profit margin.
"I see this as abuse of the U.S. criminal justice system for the commercial gain of large U.S. corporations," Mr. Ayre said in a statement posted on his personal website Tuesday. "It is clear that the online gaming industry is legal under international law."
None of the four defendants nor lawyers for them could be reached for comment.
The indictment against Bodog is the latest action by U.S. authorities to target online gambling companies operated by offshore entities and the people who help move money for them. Last year the U.S. attorney in the Southern District of New York issued an indictment against a group of executives and payment-processing facilitators affiliated with online poker websites—including FullTiltPoker.com and PokerStars.com— that had achieved mainstream popularity, with paid national television shows and a stable of poker stars who served as celebrity endorsers.
Some of the executives charged in that case still haven't been arrested because they are outside of the country. A website operating as Bodog continued to accept poker bets even after those indictments were unveiled in April.
Several states are considering proposals to allow online gambling—in some cases limited to poker—within their borders. Large casino companies are also pushing the federal government to pass a law allowing national online poker networks.
Visitors to Bodog.com on Tuesday were greeted with a message saying the website had been seized but Bodog.co.uk was still functioning outside of the U.S. and Canada. Bodog's parent company, Bodog Brand, has several hundred employees in offices in Costa Rica, Antigua, London, Montreal, Spain, and Macau, according to the company's numerous websites.
Representatives from several of those offices didn't respond to requests for comment.
For years, Mr. Ayre walked a fine line, embracing fame and media attention while avoiding travel to the U.S., where he was concerned about prosecution. He was brash about testing legal boundaries. In 2005, for instance, Bodog.com ran a 12-page advertising campaign in Esquire, about two years after the Justice Department had warned media companies they might be prosecuted for running ads by online casinos.
In an interview with The Wall Street Journal at the time, Mr. Ayre said the U.S. government had no legal basis to dispute such ads. "I don't think U.S. citizens think that Big Brother telling people what to do is good policy," he said.
In 2008 the site announced it was pulling its U.S. gambling-related advertising, while the government also cracked down on payment processing from the site, seizing funds associated with Bodog. That has made operations more difficult and its presence in the U.S. has shrunk, according to observers.
In recent years Mr. Ayre, who described himself as a "brand ambassador," has said he stepped away from the day-to-day operations of Bodog but continued to own the brand names, licensing the names and technology to others.
In blog posts he described designing homes all over the world, including a mansion in Costa Rica he called the Bodog Compound and used as a party house to promote the Bodog brand. Last June Mr. Ayre wrote in a blog post that he considers Manila and London to be home.
"I'm not actually in any one location for long," he said. "These days, my life unfolds pretty much in perpetual motion."
In a statement reacting to the domain seizure, BodogBrand, which licenses the Bodog name, said that in December it revoked its licensing agreement with the group that operated the U.S.-facing site. The groups operating in the U.K., Europe and Asia "have never taken bets from the U.S.," the company said.
A seizure warrant detailed how a detective for Homeland Security Investigations said as far back as 2006 an undercover agent of the Internal Revenue Service established an account on bodog.com and made winning bets on sports events, receiving proceeds in 2007. Law enforcement officials opened an account in 2009 and made bets through January 2012, according to the warrant.
—David Kesmodel
contributed to this article. Write to Alexandra Berzon at alexandra.berzon@wsj.com and Will Connors at will.connors@wsj.com