FTX Legal Woes, Hope for Online Poker in Kentucky, & More

This week’s casino news starts off with a gambling connection to disgraced FTX CEO Sam Bankman-Fried. We’ve got the latest for you in our weekly recap of the headlines.

Former Ultimate Bet Lawyer Turns On Sam Bankman-Fried

Former employees and investors continue to turn on FTX and their former CEO Sam Bankman-Fried. SBF was arrested in the Bahamas before he was extradited to the United States where he is facing charges in what would be one of the biggest fraud cases of all time. Bankman-Fried has seen many in his circle provide information to law enforcement as the criminal cases proceed.

FTX founder Sam Bankman-Fried, is escorted from the Magistrate Court in Nassau, Bahamas, Wednesday, Dec. 21, 2022, after agreeing to be extradited to the U.S. (AP Photo/Rebecca Blackwell)

One person that was directly involved in the Ultimate Bet poker scandal that took place in the late 2000’s has just turned on Bankman-Fried after what happened at FTX. Daniel Friedberg, formerly the Chief Regulatory Officer at FTX, is cooperating with the government against FTX and his former boss.

Friedberg resigned from his role at FTX back in early November after figuring out the full extent of the company’s financial issues. He has since been attempting to give any information he can to the authorities, though FTX had stopped him from speaking about a few things.

Friedberg has also told the FBI in an email that he is fully looking to cooperate following what happened at FTX. Unlike Bankman-Fried, Daniel Friedberg is not currently being charged with anything in regard to this ongoing FTX case but his testimony could be crucial as he might have evidence or could point investigators in the right direction.

11 People Charged in Connection to Illegal Sports Gambling Ring

The FBI has charged 11 people related to a sports betting operation that was used to circumvent taxes. They were charged after a multi-million-dollar tax evasion scheme involving gambling was uncovered by investigators. The scheme involved an illegal sports betting organization that was engaging in all sorts of practices ranging from money laundering, conspiring to commit money laundering, operating an illegal sport betting organization, conspiring to operate an illegal sport betting organization, and tax evasion.

Timothy Pughsley was leveled with the most indictments as he now faces 38 charges of tax evasion and at least one charge of the other mentioned offenses. He had started operating this bookmaking business 17 years ago and funneled his betting activities through an offshore server in Costa Rica.

It was announced that the illegal organization brought in $24 million in 2020 alone, so this was no small operation. The taxes owed from this corporation would have been worth $6 million. In 2021, their income increased to $36 million, which would mean that the IRS would be owed in excess of $7 million.

Kentucky Files Regulated Online Poker Bill

The ongoing debate regarding online poker in the state of Kentucky continues after some legislative progress was made this past week. Although another bill was filed in an effort to legalize online poker, bear in mind that Kentucky has been unable to bring in either online sports betting or online poker over the past few years. Some lawmakers continue their efforts and that’s what we are seeing again.

If passed – and there’s a really long way to go – the new bill would allow for any type of online poker through the use of electronic devices. However, there is a strict regulation where this bill won’t include lottery terminals, slot machines ,or any other game of chance where skill doesn’t play a factor in the outcome.

Even if the legislation is passed, anybody that would want to offer online poker in Kentucky would need to get a license to do so. If this bill were to pass, the fee is expected to be $250,000. Historically, Kentucky has been very against gambling in any form, so it remains to be seen whether this bill will buck the trend.