Interview with an Illegal Bookmaker

If you criminalize something that should be legal you’re creating more criminals.

by contributing author John Rothschild

This story won’t help with your handicapping.
It may help you with money management.

Most bookmakers today don’t fit the hardened movie stereotypes. Some still get by the old-fashioned way, using conventional methods and strong-arm tactics, but the new breed are more sophisticated and conduct business that can be virtually untraceable. They utilize social and digital technology and need to understand the psychology of their customers.

Some of their clients are astute.
Many couldn’t spell win if you spotted them the “w” and the “i”.

It wasn’t hard to find an illegal bookmaker. I made a few innocuous inquiries at a sports bar and my health club and found several willing to be interviewed. The most interesting turned out to be Anthony, who asked that I not use his real name. After joking that more than 1.3 million people in the United States have the same name, he acquiesced.

Anthony makes a nice living that’s simplified by the Internet. His biggest problem is collecting while remaining anonymous, but it seems that he has it figured out, and almost always gets what’s owed.

Some illegal activities just aren’t going away.
We’ve already gotten smart and legalized marijuana in some jurisdictions.
Nobody has ever died from marijuana intoxication.
Prostitution isn’t going anywhere.

It’s easier to get in financial trouble with your corner bookie. Unlike Nevada (and now six states, with more in the on-deck circle) or online venues, the local alternative extends credit depending on a customer’s perceived value and past performance.

There are three main issues with bookies.
1) They’re unregulated.
2) They’re often under-capitalized, and can’t pay their customers.
3) Clientele get overextended, often getting into trouble.

So how does our illegal bookmaker do business?
Anthony has set up shop in one of the more prestigious zip codes in the country.
He’s unassuming, but assertive.

Let’s follow the process.
Clientele:
All potential customers need to be recommended. These customers are extended an initial balance, usually without collateral, and never with a traceable credit card. Credit may be increased if customers pay on time.

Anthony conducts business over a non-traceable phone that is replaced at least every two months. Just to be safe, he removes the SIM card (holding your personal account information) before disposal.

He buys his phones with cash and under a fictitious name.

Wagering access:
All transactions are done online with extremely sophisticated software. You can wager on anything from live-betting on games, casinos, politics, to lotteries and even stock market outcomes. Wow!

Agents:
Anthony has agents responsible for getting new business, collections, and payments.
Depending on circumstances, he pays each agent approximately 20% of any gambler’s losses.

Payment:
This one is pretty simple. Although almost always getting paid, he gets lots of excuses from clients either looking for more time, or hoping to carry losses to the next week and chasing. “Chasing” is a loose term for wagering more to get your money back. A predetermined balance is set. When exceeded, a transaction occurs Usually, losers pay on Tuesday, and winners collect on Thursday.

Slow payment and balances:
Customers who use all of their assigned credit get locked out of their accounts. They get to wager again once they pay a certain amount. They always do. If late, losers pay a premium, which is added to their balance, of at least 10% per week.

I told Anthony some of my stories about irresponsible gamblers and asked if he had any. He did, and they all concerned excuses and collections.

Anthony has no collateral with his clients. If he doesn’t collect, he may not be able to pay. If he has to borrow to pay, he makes less. If too lenient, he’ll go out of business. If a customer owes for more than a week, the customer gets to pay more, lots more than a bank will ever charge for credit.

The following was my favorite. Not because it’s that unbelievable, but because this client actually thought his defensive explanations sounded plausible. Anthony had heard most of them before, but not all from one person.

It’s about a gambler who got greedy, lost, chased, and then tried his best to put off payment.

This is how Anthony described his customer, who we’ll call Willie.

“Other than payments and collection, I have very little contact with my clientele, except for Willie. For some reason, but only when gambling, he needed to contact me at least five times a day.

His communication skills seemed to diminish once he got into financial trouble. He blamed the lag time on excessive work. These excessive work issues sure didn’t exist when he was making 20 wagers/day. The correspondence time period got longer as the debt got older and accrued interest.

“I don’t remember his first excuse that well, but know that it was somehow medically related(1).

He promised payment once healthy. That didn’t happen, because then a family member got sick(2).

Next, he was in the emergency room for an eye issue(3). He told me to expect payment on his release, which I thought was an interesting choice of words.”

As Anthony listed the excuses. I was thinking that this gambler just wasn’t very creative.

Each involved a physical ailment.

“After that I didn’t hear from Willie for about a week. Now he was convalescing at his parent’s’ home(4). I checked his Facebook page, and got to see some restaurants he’d recently visited.

I had no idea why anyone else would care, but I sure did.

“His next correspondence stated that we had already profited from his wagers and we should be willing to settle for the industry standard of 60%. That was news to me(5).

“Then he just needed to wait ’til the end of the month when he got paid. He offered to send a copy of his paycheck, but never did that, either(6).”

This just kept going.

“Next, he couldn’t pay at the end of the month because his hours were cut
when in the hospital. I asked him why he didn’t know this prior to his last promise, but got no response(7).

“Then he was going to get a loan(8). Still nothing. Then he texted that he would have to pay me by the slow drip method(9), whatever that is. I asked if he meant a few hundred dollars per week + interest, but didn’t hear from him again for another 10 days. Even his slow drip smaller payment method yielded nothing.

“The next text was my favorite. He told me to stop threatening him because he’s been upfront about everything”
I don’t threaten, but I do recover.”

“At this point I was getting tired of Willie, realized that escalation might only result in small weekly payments and decided to give him one more attempt at resolution. In my next correspondence I told him that we would set up a collection schedule at a high rate of interest that would be paid out over time. If a week was skipped he would still have to give us $150, but the balance would stay the same.

“The next response was infuriating.”
He texted that he didn’t want to insult us with a small payment(10). I told him that it wouldn’t be an insult and got no answer, and of course no payment.”

“At this point we start doing our research for advanced collection. We already know his contacts at work, and have hacked his social media accounts. Now we just don’t like Willie!”

“In his next correspondence Willie was kind enough to let us know that he was at his parent’s’ house for the holidays, and would contact us upon his return. We checked and found out that his parents live close by(11)”.

“In his last attempt to put off payment Willie let us know that he would be getting a large tax refund, and then all would be settled(12).”

“We had actually stopped communication with him after excuse number 10″, and now had to get serious.”

Here’s how it works.

Nobody ever gets physically rough, they don’t have to. The embarrassment and possible income ramifications (his job in this case) may be worse. Anthony has a crew that will do the following:

1) Sight unseen give the debtor lots of public mentions (from a unique IP address) on social networks that can be seen by friends and coworkers.
2) Have someone well-dressed repeatedly show up at your place of business as a certain type of bill collector.
3) He has even filed claims to the CRA’s (credit reporting agencies), damaging credit.

Now I was really curious and wondered what happened next, wanting to know all the remaining details.

I asked Anthony how everything ended. He just smiled, and said “fine.”.

John Rothschild’s latest “Best Seller”