Calvin Ayre, the Canadian founder of the billion-dollar Bodog brand, was indicted in the U.S. on Tuesday for allegedly running a massive Internet gambling operation. Along with three co-accused, Ayre, the son of pig farmers from Saskatchewan, was charged by prosecutors in Maryland. From the Globe:
While the U.S. has passed stiff laws against Internet gambling, a lack of comparable legislation in other jurisdictions has stifled bids to extradite out-of-country suspects to the United States for trial.
In response to the new allegations, Mr. Ayre posted his reaction on his personal website: “I see this as abuse of the U.S. criminal justice system,” he said in a statement. “….It is clear that the online gaming industry is legal under international law.”
Forbes profiled Ayre for a cover story in 2006:
From this tropical oasis [Costa Rica], Ayre has dodged and taunted those enemies, the main one being the U.S. Department of Justice. His Bodog Entertainment Group is in the not very kosher business of Web gambling. It takes bets from 16 million customers, most of them in the U.S. And that appears to violate the law–Title 18, Section 1084 of the U.S. Code–which forbids using telephones or other communication devices “in interstate or foreign commerce” in order to take bets. “Online gambling, whether it is located offshore or not, is illegal when it comes to the United States and its citizens,” says a Justice Department official who works on Internet gambling crimes.
But Bodog has no physical presence in the U.S., Ayre is not an American citizen, and the extraterritorial reach of U.S. law is not clear. Ayre, at any rate, has no assets in the U.S. for the G-men to seize.
Last year the privately held Bodog handled $7.3 billion in online wagers, triple the volume of 2004. Ayre says all this betting gave him sales of $210 million, and that he took 26% of the revenue to the bottom line. What’s his business worth? Two similar ventures that are publicly traded (in Europe) go for well over 18 times trailing earnings. At that multiple, Bodog, along with other assets, gives Ayre a net worth of at least $1 billion.
Wednesday, February 29, 2012