Defendant Pleads Guilty in California Betting Scandal

The latest California betting scandal has culminated in a guilty plea from the primary defendant.

Damien LeForbes, a professional poker player, has pleaded guilty to operating an illegal sportsbook. He also entered a plea of guilty for money laundering charges.

LeForbes’ operations were based out of The Golden State and The Battle Born State (Nevada). While sports betting in Nevada is legal, sports betting in California remains illegal.

Granted, the legality of sports betting doesn’t necessarily change the nature of the charges. Sure, sports betting in Nevada is legal. But you must have a license to operate a sportsbook. LeForbes did not have one.

The pro poker player now faces up to 15 years in prison. He could also see up to three years of supervised release and receive a hefty fine. Per multiple reports, LeForbes could be docked $500,000 or “twice the gross gain/loss resulting from the illegal business, whichever is great.”

LeForbes Ran Illegal California Betting Operations for Years

While details of this illegal California betting ring continue to trickle out, it seems like we have a vast majority of the background. Matthew Waters of Legal Sports Report provided a full synopsis:

“LeForbes set up his illegal sportsbook no later than January 2021 and continued the business through last December 2023. He took bets in Los Angeles County and Orange County in California, and in Clark County, Nevada. LeForbes employed agents who would bring in new bettors in exchange for a portion of their gambling losses. They would use a website or call center to create accounts where bets could be tracked. LeForbes also recruited casino hosts to work as agents, including two from an unidentified casino that referred at least two new bettors to the business. The illegal operation took payments in checks and wires in the name of a shell company called DJL, as well as through cryptocurrency, cash and payment processors like PayPal. LeForbes is listed as the president of DJL on his LinkedIn profile.”

The fact that DJL survived basically two years is pretty wild. From the sounds of things, this was a fairly advanced operation. It also seems to have been fairly lucrative.

In the court filings, there is a casino identified as Casino A. This is the place from where LeForbes would hire his own agents. He also “executed at least 17 personal checks” at the establishment over a 26-month period. According to those filings, he wound up placing wagers in excess of $148 million at Casino A. As Waters noted, the process of getting paid in chips proved useful for LeForbes. In fact, LeForbes reportedly said Casino A chips were “so versatile” for him.

Cryptocurrency Also Played a Huge Role in Illegal Sportsbook Operations

Cryptocurrency has become a major element of sports gambling. The trend only seems destined to continue. The rise of online sports betting in the United States doesn’t seem on the verge of slowing down. Not only is cryptocurrency loosely regulated, but deposit and withdrawal transactions are typically processed instantly.

It turns out cryptocurrency was a major part of LeForbes’ California betting operations. Specifically, he took advantage of deregulation and the relative difficulty of tracking transactions.

What’s more, it sounds like he was transferring millions of dollars in any given week as part of his illegal California betting establishment. “I do it every week for millions back and forth,” he said. “And on a week like this where I owe [a bettor] $2 million, I can send him all [Bitcoin] and keep the cash/chips I was going to give him.

Does the Latest Scandal Help or Hurt California Sports Betting Chances in 2025?

Naturally, many are wondering what this illegal California betting ring can mean for the future of sports wagering in The Golden State. Though the issue was tabled in 2024, efforts are expected to ramp up again in 2025.

Opponents of California sports betting will point to scandals such as this to illustrate the seedy underbelly of the industry. Supporters, meanwhile, will use this to highlight the importance of legal California sports betting and the increased regulatory processes it promises to bring.

In reality, if we’re being honest, this issue will not sway the future of gambling in The Golden State one way or another. There will always be illegal California betting operations. That’s just how these things work. People will break the law, no matter the industry.

Of course, if we had to choose, a multimillion-dollar California betting ring might help advocates of sports betting more than hurt them. Like we already mentioned, legal sports betting comes with heightened regulation. That, in theory, will make it easier to shut down operations such as the one run by LeForbes. It also disincentives customers from using illegal sportsbooks since they receive such easy access to fully licensed ones.

To what extent this scandal and others come up will be a matter of course. The California state legislature will meet in early 2025. We’ll see if this topic comes up. And in the meantime, we should also brace for potential blowback on the Nevada casino(s) identified in this court filing. Knowingly or not, this place (or these places) played a role in enabling LeForbes’ illegal sportsbook. And given how much state regulators have recently focused on reining in gambling establishments, this could be a scandal that incites material change throughout the casino industry.

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