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An Off Shore Bet

With its advanced technical infrastructure, loose laws and beautiful women, Costa Rica has become a haven for hundreds of American sports-betting
Michael Kaplan
From the Print Edition:
Tyson vs. King, Jan/Feb 04

(continued from page 2)

Beyond that, the competition among Costa Rican sports books is cutthroat, with outfits competing by offering impossibly large sign-up bonuses that go as high as 20 percent of the money that new customers put on account. Though it sounds good, such largesse can also be a sign that the sports book will not be around long enough to pay off its winners. "My rule of thumb is that if anybody is giving a 20 percent bonus, don't sign up with them," says Gatten, explaining that it's too high of a perk to allow the company to survive. "Chances are the place wants your post-up money and will then go broke. Ten percent is really the norm."

Questions loom as to whether Costa Rica will be the gambler's refuge for much longer. In light of the recently activated licensing fees, those in the industry fear that politicos in their adopted homeland will get as greedy as the Dominicans had once been. And while few bookies are currently prepared to say hasta la vista, baby, they are looking at alternatives to Costa Rica. "Right now Panama is a front-runner," says one sports-book manager who recently returned from a trip to Panama City. "The place is completely modern. It's got a skyline that rivals those in many American cities, and it's cheaper than San José. From what I understand, the government is looking to bring in 10 big sports books." The manager's cell phone rings, he deals with some business involving a line move for an NBA game, then he softly adds, "One problem, though, is that Panama has a closer relationship with the United States than Costa Rica does."

And therein lies the rub. Never mind that it's legal to book bets in Costa Rica, the true lawfulness of what the offshore books are doing remains fuzzy. Consider this: if an American citizen opens a sports-betting business in a place such as Costa Rica and takes bets from customers in the United States, is he breaking the law? Maybe. Since hardly anyone in America has ever been busted for placing a bet (only for taking them) and taking bets is legal in Costa Rica, you have an area so gray that even attorneys who specialize in representing gaming-related cases can't provide a straight answer.

What's indisputable is that Ron Sacco -- who supposedly became a massive FBI target after showboating on "60 Minutes" -- was recently arrested while trying to go from Costa Rica to Nicaragua. The Costa Rican government maintained that his passport was not in order, and, rather than take his chances waiting for slow justice in Central America, Sacco turned himself in to U.S. authorities where an old bookmaking warrant led to his receiving a nearly two-year prison sentence.

Sacco's arrest had a chilling effect on Costa Rica's sports-book community and has led to much speculation about the future of online gambling as a big public enterprise. Already the U.S. attorney general has advised publications such as Maxim and radio programs such as the "Howard Stern Show" (both beneficiaries of advertising dollars from Costa Rican sports books) that running ads for offshore gambling may put them in the position of aiding an illegal activity. "Right now the American government is the biggest threat to the future of online gambling," says one bookmaker who believes that the business will be forced to return to its underground roots. "Supposedly the NBA and NFL are at least partially behind it. But the really ridiculous thing is that sports betting helps keep basketball and football and everything else going. Without having a little something riding on the game, how many people do you think would really bother to watch?"

Michael Kaplan is Cigar Aficionado's gambling columnist.

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