US Sports Betting Update – professional poker player arrested after allegedly scamming sports bettors in $25m scheme
Professional poker player Cory Zeidman has been arrested on charges of fraud and money laundering after allegedly masterminding a $25 million sports betting scam. The 2012 World Series of Poker bracelet winner was arrested this week in Florida and he made an initial appearance at a federal courthouse in Miami. Investigators in New York accuse him of leading an organization that lured in victims through national radio advertisements, promising them inside information on “fixed games.” However, officials say he has no such information, and many victims lost their life savings.
“Mr. Zeidman took advantage of the public’s interest to ‘get in on the ground floor’ of his sports betting organization,” said Daniel Brubaker, United States Postal Inspector in Charge. “He devised a criminal scheme to fatten his pockets using nothing more than people’s love for sports and his clever words wrapped around a fraud. Postal Inspectors remind investors to thoroughly review all investment offers to ensure they are not left with a line of empty promises and a drained bank account.”
Victims lured into the scheme were led to believe that the organization had privileged information that made betting on sporting events a no risk proposition. However, investigators say the information was either fictitious or obtained from an internet search by the defendant and his co-conspirators. The scheme was run out of Long Island and Florida. The federal indictment was handed down from the United States District Court for the Eastern District of New York.
A String of Aliases
The defendant used a series aliases: Richard Barnes, Walter Barr, Mr. Carlyle, Ray Palmer, Rick Cash, Elliot Stern, Gordon Howard, David Coates, Simon Coates, Paul Knox, Mark Lewis, Joel Orenstein and Steve Nash. Some of the company names used by his scheme were Gordon Howard Global, Ray Palmer Group and Grant Sports International.
“As alleged, Zeidman defrauded his victims, stole their life savings and persuaded them to drain their retirement accounts to invest in his bogus sports betting group, all so he could spend it on international vacations, a multimillion-dollar residence and poker tournaments,” said United States Attorney Breon Peace. “The indictment serves as a reminder to all of us to be wary of so-called investment opportunities that purport to have inside information, as they are really a gamble not worth taking.”
Ricky Patel, Acting Special Agent-in-Charge, Homeland Security Investigations, added: “As alleged, Zeidman preyed on individuals who were led to believe he had inside information that would lead them to easy money. In reality, he was selling nothing but lies and misinformation— bilking millions from victims along the way, leaving their lives in financial ruin and their bank accounts empty. HSI will continue to work together with our partners to follow the money and tackle complex financial investigations to bring to justice fraudsters like Zeidman, who finance their lavish lifestyles by concocting ways to bamboozle the innocent when their only real goal is lining their pockets with ill-gotten cash.”
April Sports Betting Figures Roll In
In other news, several states reported robust April trading figures this week. Nevada led the charge with a sports betting handle of $582.5 million. That is a 28.1% year-on-year increase compared to April 2021. It was another strong month for bettors, as Nevada sportsbooks held just 4.35% of wagers placed. The average hold for the first four months of 2022 is a mere 4.29%, compared to the state’s average of 5.69% and the national average of 7%, suggesting that bettors in the Silver State are getting savvier.
The $582.5 million handle in April was a 32.5% drop compared to March. It also represented the first month in which the handle dipped below $700 million since August 2021. However, that was to be expected, as April has always been a reasonably quiet month in the sporting calendar, and operators will be pleased by the year-on-year growth. Basketball was the most popular sport, as April captured the tail end of March Madness and the NBA playoffs. Bettors wagered $247.1 million, and held 5.91%. They held 3.8% on baseball.
Strong Growth in Michigan
A similar trend was evident in the Midwest. Michigan and Indiana both reported strong year-on-year growth, although April was their slowest month since last fall. In Michigan, sports fans wagered $396 million in April, according to the latest report from the Michigan Gaming Control Board. That was the first month in which the handle did not exceed $400 million since September 2021, but it did represent a 44.4% increase on April 2021.
Michigan bettors were not as astute as their Nevada counterparts when handicapping games in April. Sportsbooks in Michigan reported an 8.2% hold, amounting to $32.6 million in revenue. They only held 6.8% of wagers placed the previous month. FanDuel was the most popular online sportsbook in Michigan last month, accounting for $118.4 million of the handle. BetMGM held onto second place for the second consecutive month, with a handle of $89.8 million. That left it ahead of DraftKings, which took $78.1 million. Barstool was a distant fourth, ahead of Caesars, PointsBet, BetRivers, FOX Bet, WynnBET, FireKeepers, TwinSpires, Golden Nugget Sportsbook, Parx, Four Winds and Eagle.
FanDuel Dominates Indiana
Indiana sportsbooks reported a handle of $360 million for April. That was down 24.4% compared to the previous month, but it was up 52% on April 2021. Sportsbooks held 8% of the handle, which left them with revenue of $28.6 million. The Hoosier State collected $2.7 million in taxes.
FanDuel also reigned supreme in Indiana with $112 million in wagers, which represented a 34% share. DraftKings was second, with $97.5 million. At one stage, DraftKings was outpacing FanDuel in the Midwest, but FanDuel has now started to assert the same sort of dominance it enjoys on the East Coast. BetMGM was in third place in Indiana with $45.4 million, followed by Caesars ($36.1 million). Barstool was fifth, with a slightly larger handle than BetRivers, and the remainder of the handle was shared between PointsBet, Unibet, WynnBET, Betway, theScore Bet, TwinSpires, Bally Bet and SBK.