Vegas Sports Betting: Madoff Style

“That’s the truth about Las Vegas. We’re the only winners. The players don’t stand a chance.” — Nicky Santoro

According to a note from the U.S. Attorney’s office, on November 2, 2020, two men by the name of John Frank Thomas III, 75, and Thomas Joseph Becker, 72, stood before a federal judge on charges of conspiracy to commit wire fraud and an additional 13 counts of wire fraud in a highly sophisticated, multi-million dollar sports betting scheme defrauding over 600 people.

These two sharks are both in their 70s and clearly aren’t strangers to the court system. Both men pleaded guilty in 1990 to organizing a $30 million scheme that involved buying and leasing copiers and printers to educational institutions. Becker was slapped with a seven-year prison stint and Thomas spent 10 years behind bars. These hero’s were accepting customer payments between $10,000 and $500,000 to be placed into their “investment funds”. For what it’s worth, the funds totaled around $30 million from September 2010 to August 2019.

“We grow money a million times faster than Warren Buffett … actually we grow it a quadrillion times faster. Just can’t move it into the banks that fast. Online sports betting solves the bank cash flow problem,” — John Frank Thomas

Their retribution includes 20 years in prison and a juicy $250,000 fine if convicted. Per the indictments, Thomas and Becker donned a guru-like masquerade for their clients and embellished past betting success to gain their trust. Eventually, they set up sports betting mutual funds, which were legalized in Nevada in 2015. This relatively new rule allowed the state’s sports books to take action on pooled investments from out-of-state entities. Basically, they’re hedge funds, but capital is wagered on sports using professional betting systems rather than invested in securities. Lawmakers kept their fingers crossed, hoping this would bring more money into sports books, but many operators found the regulations burdensome and the proposition risky, preferring not to accept the funds at all.

In this basket of “funds”, they created Sports Psychometrics, Vegas Basketball Club, Vegas Football Club, Einstein Sports Advisory, Quantum Sports Advisory, Wellington Sports Club, and Welscorp Inc. Once they convince their clientele of their special insights into teams’ personnel, their “ahead of the curve strategies” would spawn an average profit of 140%-180% for every $100 wagered. Theoretically, their special skills would lead to unlimited winning since every wager had a positive expected value.

The best part of all this? Becker and Thomas weren’t even using the money to bet the games. This thick as thieves duo told investors that their investment accounts were growing in value due to successful sports betting. However, true to the Madoff form, they didn’t bet on sports at all— they just moved money around.

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