Thu | May 23, 2019

Con man's 'cash pot' - High-tech illegal gambling operation rakes in $millions

Published:Sunday | July 15, 2012 | 12:00 AM

Durrant Pate, Gleaner Writer

Big money, big business, but it is all underground. Illegal operators rake in millions of dollars in sales of the popular Cash Pot game despite concentrated efforts by the police and the Betting, Gaming and Lotteries Commission (BGLC) to shut them down.

A Sunday Gleaner probe has revealed that the illegal operators are getting more sophisticated, using remittance agencies to expand their operations islandwide while pulling millions from the licensed operator Supreme Ventures.

Vice-president of group corporate Communications at Supreme Ventures, Sonia Davidson, last week confirmed the Sunday Gleaner findings.

"Yes, we are aware of some of the more sophisticated methods now being used with the aid of technology. We do gather intelligence from the field," said Davidson.

The BGLC is also aware of the increased use of technology by the illegal operators and their sales agents popularly referred to as 'runners'.

In one recent case, the BGLC held an illegal operator who had a very elaborate accounting system, which showed him having an annual turnover of $300 million with his top sales agent or runner earning $3 million for the year.

"The accounting records and computerised system were so detailed that they showed the sales by all agents, the dates on which the sales were made, payments to sales agents and even loans to sales agents by the illegal Cash Pot operator," said Derrick Peart, executive director of the BGLC.

He confirmed that remittance agencies

are now being used in the illegal Cash Pot business.

According to Peart, "Runners use
the remittance agencies to funnel the profits from their weekly
activities to bankers, while the bankers utilise these agencies to send
cash to agents to cover winnings when the agents' daily sales are not
able to cover payments for winnings."

Peart noted that
the illegal operators use a combination of computer and telephone
technologies, where the numbers bought and the amount wagered are
transmitted to the banker from runners in some cases 10-15 minutes
before the draw takes place.

The BGLC boss said the
technology has allowed many illegal operators to go national in their
business, servicing remote communities where Supreme Ventures has a
difficulty setting up shops.

Roving
business

The illegal operations have also moved from
being stationary enterprise to a roving business where runners travel
gate to gate selling numbers. This makes it convenient for players who
do not have the time to travel to a Supreme Ventures
location.

In addition, the runners offer credit to
regular customers, a deal which Supreme Ventures cannot
match.

Davidson explained that Supreme Ventures'
operation is governed by the conditions of its gaming licence, the major
one being a fixed-address location for lottery
operations.

"As such (the company) is not able to
participate in some of the methods being used by illegal operators,
including the use of runners, bets via telephone and Internet," said
Davidson.

She noted that the company continues to
expand its network of lottery terminals islandwide to make the legal
game available in a convenient manner to the
public.

At the start-up of the Cash Pot game in 2001,
there were 300 legal agents operating across the island. That number has
now grown to more that 1,000.

In the meantime, the
BGLC said its new drive to shut down the illegal Cash Pot operators will
see it focusing on the bankers and major
operators.

Illegal operations
ended

According to the BGLC, that strategy is already
reaping success, dismantling a number of illegal Cash Pot
operations.

Peart said the new strategy is targeting
the big bankers, whose operations may also involve money laundering, as
seen in the case of Kingston businessman Patrick Chang, otherwise called
'Three Hand Chang', whose illegal gaming business made $278 million
over an eight-month period - January to August
2003.

Chang pleaded guilty to breaches of the Money
Laundering and the Betting, Gaming and Lotteries acts at his trial in
September 2007.

The BGLC boss noted that the new
strategy is informed by the experience that eliminating the banker is
the only sure way of having any serious impact on the illicit
trade.

"Each time a runner is caught and brought
before the court, the small fines imposed by the magistrate is paid for
by the banker in return for that individual's continuing
service."

Peart contended that most bankers have set
up multiple operations, spanning several communities throughout the
island, and as such moving forward requires a more targeted enforcement
strategy.