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2014 in Sports Betting: From Fantasy Sports to the Sports Trading Club Scam

Dec 16, 2014 - by Monica Erdei
Betting news in 2014

How did the betting business do in 2014?

From the rise of fantasy sports to notorious wagering scams, 2014 was an exciting year for the sports betting industry.

This year’s World Cup in Brazil brought joy and excitement for sports fans and millions of dollars in profit for wagering companies, but it also created the perfect opportunity for illegal betting syndicates to thrive.

Two major scandals – Peter Foster’s Sports Trading Club and a suspicious betting operation led by Wei Seng Phua from his rented villas at Caesars Palace – are still under police investigation, but it’s not all bad news. For the fantasy sports industry, 2014 was a great year, with significant growth and promising perspectives.

Let’s take a quick look at some of the most significant events that happened in the sports and wagering industry this year.

GamingZion: The Birth of Fantasy Sports Spawns Billion Dollar Industry

Fantasy sports have become increasingly popular over the past decade. At least in the US, where sports betting is illegal – online or otherwise. There are only four states where local players can legally wager on sports, but not via the internet. But players have found a way around these rules and discovered a new way to quench their thirst for gambling.

Fantasy sports are games where users take on the role of make-believe owners of professional sports teams. And what sports fan wouldn’t want to take a shot at managing their own football, basketball or baseball team? The options are endless.

Last year, the Fantasy Sports Trade Association made $11 billion in revenues. And while some play as a hobby, with their friends or coworkers, others enter that very grey area of American gambling laws and turn it into a fantasy sports betting operation.

ESPN, Yahoo!, CBS Sports, and the NFL are fully aware of how profitable this industry is becoming. The NFL itself has invested a lot of money in hi-tech platforms that support fantasy football league requirements.

Forbes: Will ESPN, Yahoo! Or CBS Buy This Fantasy Sports Startup?

According to Forbes, major companies like ESPN , Yahoo! and CBS could enter the fantasy sports scene in the future. The investors may be joining well established names like FanDuel and DraftKings, created in 2009 and 2012 respectively. But since it would take a long time to build a reputation, buying existing platforms makes more business sense.

Dan Ziernick, one of the most successful daily fantasy sports players has decided to invest in developing his own platform, to compete with FanDuel and other websites which have helped him earn win about $3.5 million throughout his career. This is how FantasyUp was born. The new platform’s major selling point is a no-rake policy which will remain in effect until April 1, 2015.

“The big vision in this industry is that the players like ESPN, Yahoo! and CBS, are going to enter this space once legalities of online gambling clears up,” Ziernicki said. “What we’re really focusing on is being the technological company for the future. To be able to process large amounts of data in real time. We are not there yet, but we are already able to handle the biggest daily fantasy sports day ever.”

The players believe another three to five years will pass before big names like ESPN or Yahoo will get into daily fantasy sports, but he is convinced that, by then, his platform will be a in the right place for a potential acquisition.

Sydney Morning Herald: Peter Foster implicated in international betting scam

Notorious conman Peter Foster was arrested at his luxury property near Byron Bay and could lose millions of dollars, after police found evidence linking him to an illegal operating ring called the Sports Trading Club. It is believed that he ran the business while hiding from authorities.

According to a police source, Foster had six mobile phones and several computers in a home office, which he used to operate a betting syndicate that claimed to be based in London, Sydney and Hong Kong.

The source added: “It doesn’t matter what they claim on their website, Fosters’ home in Byron Bay was the headquarters. This is another massive scam that is only coming to light now. It will collapse like a house of cards.”

Sports Trading Club, also known as STC Sports Trading Club and The Sports Trading Club Partnership accepts money from high-paying clients and “invests” it in international sports betting. This July, the company claimed to have made $150 million by backing Germany to win the World Cup.

Review Journal: International mob-connected ring linked to illegal World Cup betting at Caesars

Shortly after the World Cup in Brazil ended, the police have shut down an alleged multimillion-dollar illegal sports betting business operated from three villas at Caesars Palace. Authorities believed the ring was run by Malaysian and Chinese nationals and led by poker player Paul Phua. Police said his son, Darren Wai Kit Phua, was also involved.

In a criminal complaint, Las Vegas FBI Agent Minh Pham claimed Wei Seng Phua was “known by law enforcement to be a high-ranking member of the 14K Triad.” His lawyer denied these claims.

Assistant U.S. Attorney Kimberly Frayn wanted to keep both father and son under arrest, saying they were threats to flee, but U.S. Magistrate Judge Bill Hoffman ordered their release, imposing several restrictions including a $2 million bail. Phua also had to put up his $48 million private jet as collateral.

Phua was arrested on similar grounds on June 18 in Macau, where he and 20 other people were accused of running a large gambling ring that accepted hundreds of millions of dollars in illegal bets.

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