NEW YORK (Reuters) - U.S. authorities arrested eight people on Monday in connection with a Costa Rica-based online sports gambling operation they said made millions of dollars in profits annually.
Twelve men face charges including conspiracy and illegal gambling in an indictment unsealed on Monday in Manhattan federal court for their role in operating a gambling Web site and call center that serviced U.S.-based sports bookies.
U.S. prosecution of foreign online gambling companies has drawn criticism from such companies in Europe, who have accused the Justice Department of violating World Trade Organization rules by singling out foreign companies in such cases.
In the latest case, U.S. prosecutors said that starting in 2005 Carmen Cicalese headed the operation out of Costa Rica, charging several hundred U.S. bookies weekly fees of $15 to $30 for each gambler they registered.
The gamblers then placed sports bets either via a toll-free number or on Web sites including datawager.com and betwestsports.com, the indictment said. While the operation set the odds for the bets, the payouts were left to the bookies, authorities said.
U.S.-based “runners” for the operation collected the fees and transferred the money back to Costa Rica through couriers, credit cards and electronic funds bank transfers.
Eight arrests were made in the states of New York, Massachusetts and Maryland. Cicalese remains at large, authorities said.
In December the European Union agreed to let Washington withdraw a 13-year-old commitment to allow foreign firms to offer gambling services in exchange for U.S. trade concessions in other areas.
The deal followed U.S. legislation in 2006 that made it illegal for credit card companies to accept charges for online gambling, effectively closing the market to foreign companies.
These and other laws effectively make it illegal in the United States to offer online gambling, which federal authorities fear could be used to launder money.
Reporting by Christine Kearney; Editing by Daniel Trotta and Eric Walsh