Monday, October 26, 2015 : NEW YORK TIMES IN ONLINE SPORTSBOOK EXPOSE
Pinnacle targeted by newspaper's investigative team.
If the New York Times investigative team's allegations about a presence in the United States are true, Pinnacle Sports is taking big risks in using US-based servers.
The newspaper published a lengthy expose on sports betting in general and Pinnacle in particular over the weekend, highlighting the fact that it appears to be using servers in the United States, where federal agencies are especially active in busting illegal online sports betting operations.
The Times identified one location in Manhattan where Pinnacle content is being channelled as online gambling companies that are prepared to take the risk of operating in the difficult US market introduce new ways and dynamic technologies to fly under the enforcement radar.
"For years, offshore sports books like Pinnacle have used technology and other means to keep prosecutors at bay. In the United States, field agents are arrested, money is forfeited and the illegal gambling rings are seemingly dismantled," the NY Times reports. "Yet they rise again, with different street soldiers and a new arsenal of deception. The one constant is the Internet, which allows for the electronic brain of these sports books to evolve, beyond the reach of American prosecutors."
And the newspaper asks:
"This pattern raises a persistent question: Are the successes of law enforcement tantamount to cutting off a lizard’s tail only to see it grow again, and if so, is the battle even worth fighting? Is the better way – with gambling increasingly woven into the fabric of American sports – to simply legalize it so it can be regulated?"
The Times article appears to have been triggered by the current furore around daily fantasy sports, which is mentioned in the story, although the team has apparently been working on the internet sports betting expose for some time in collaboration with the PBS series “Frontline”.
The investigation covers how offshore sports books operate and survive on American soil, commenting that despite all the recent publicity around DFS, online sports betting remains a considerably larger business.
Pinnacle's official position is that it exited the US market in 2007, operates from Curacao and that it does not "knowingly" accept US action, but the Times claims that its European and American investigators have discovered that Pinnacle has had thousands of betting customers in the United States since 2007….and details how this is achieved, including the establishment of a direct digital presence in the States.
The newspaper claims that it is clear that by 2014, vast amounts of gambling data, once housed legally offshore, were being delivered to the United States from equipment in New York, Miami, Chicago, Dallas and elsewhere through CDNetworks.
“For them to knowingly collect data in New York for the purpose of furthering a bookmaking enterprise, if that’s what they’re doing – that would be a significant exercise of brazenness on their part,” said Gerard Brave, the chief of the rackets bureau for the Queens district attorney, Richard A. Brown, who has prosecuted Pinnacle operatives in recent years, although the company itself has not been pursued in the United States.
Brave added, “That would be very interesting to us, and we would certainly be looking into that.”
Perhaps alarmed by the activity of the newspaper's investigators, Pinnacle maintained that its content is delivered legally from Curacao, and that its US activity is confined to "traffic acceleration."
However, the Times reports, in the run up to its publication of the article last week, United States traffic to the Pinnacle website abruptly shifted from equipment on American soil to servers in Europe and elsewhere, according to an analysis by Dyn, an Internet performance company.
Doug Madory, the director of Internet analysis at Dyn, said that at about 1 p.m. Eastern time on Thursday, queries from the United States to Pinnacle’s website began to be redirected.
Before that time, the queries went to the nearest American city with CDNetworks equipment; afterward, the queries started going to CDNetworks equipment in Europe and elsewhere.
“Somebody instituted a pretty big shift out of the U.S., which is the epicentre of the Internet,” Madory said. He called the move “completely counter” to typical practice.
The full expose can be accessed here: