5Dimes Settlement With Feds Announced
Offshore Operator 5Dimes Reaches $46.8 Million Settlement With U.S. Government
As first reported by ESPN’s David Purdum, well known offshore operator 5Dimes reached a $46.8 million settlement Thursday with the U.S. government. The settlement is between 5Dimes and the U.S. Attorney for the Eastern District of Pennsylvania (EDPA). 5Dimes settlement with the EDPA brings an end to the U.S. government’s investigation into the Costa Rica based sportsbook operations in the U.S. The settlement appears to present a path forward for 5Dimes to enter the regulated U.S. market.
Why is 5Dimes settling?
The 5Dimes settlement was pursued by their owner Laura Varela following the kidnapping and death of her husband, 5Dimes founder William Sean “Tony” Creighton, in Costa Rica in 2018. The settlement noted that while Varela assumed control of the company following the death of her husband, she was not involved in any of the company’s illegal activities. The settlement brings an end to the U.S. government’s 4 year long investigation into the company’s involvement in wire fraud, money laundering and transmission of illegal gaming activity.
Under the settlement agreement Varela agreed to forfeit cash and assets valued at $46.8 million. in addition Varela agreed to reorganize the company in a manner “suitable for participating in lawful gaming operations across the world”. In exchange the EDPA acknowledges that Varela was not involved in any of the illegal actions of 5Dimes and is free to use her assets and the assets of 5Dimes in the future.
Where is 5Dimes planning to launch following the settlement?
The company announced their intent to enter the regulated U.S. market following the settlement announcement, and has already incorporated in Delaware as 5D Americas LLC. At this time it is still unclear how state regulators will view the types of criminal activity detailed in the settlement. In a statement to the New York Times 5Dimes attorney, Jeff Ifrah, indicated that the company’s first step will be applying for a license in New Jersey.
Industry insiders expect the result of 5Dimes application to the New Jersey DGE to determine their fate in the regulated U.S. market. On the one hand the New Jersey DGE’s willingness to award a license to 5Dimes could present a path forward for bringing offshore operators into the regulated U.S. market similar to the development of the online poker market in 2010’s. On the other hand state regulators will be wary of any actions that appear to reward bad actors. Furthermore, many expect the existing regulated operators to mobilize their lobbyists in opposition to 5Dimes.
Who is 5Dimes?
5Dimes is a brand that most players will recognize, having accepted U.S. players since their founding in 1996. Founded by William Sean “Tony” Creighton, 5Dimes became one of the most popular sports betting and casino websites for U.S. players. Prior to the repeal of PASPA in 2018, the only online options for U.S. players outside of Nevada were carribean based operators like 5Dimes. While these operators held licenses to operate in Costa Rica, they were still operating illegally under U.S. law.