What if Ippei Mizuhara had started betting with a legal operator in a legal market?

US operators have many checkpoints in place that may have indicated Mizuhara had or was developing an addiction problem. And none would have extended Mizuhara credit to gamble.

But the short answer, according to a recovering addict turned addiction counselor, is that none of that would have mattered. The best efforts by legal operators are no match for addiction.

“To a (addicted) bettor, none of those are a deterrent,” said Dave Yeager, who overcame a gambling addiction and is now a recovery counsellor. “In the throes of an addiction, when the addiction is at its highest, when the next bet is so all-consuming, then nothing else matters…. There’s just not a whole lot of things that are going to stop you from doing it.”

At its height, addiction is overpowering

Yeager, who works for Kindbridge Behavioral Health, developed a gambling addiction playing slot machines while serving overseas in the army. He lost his marriage, his job and his savings. And it wasn’t until he was ready to change that he sought help.

“It’s about what point in the addiction you’re at,” Yeager said about seeking help.

Yeager said the rush addicted gamblers experience is overpowering. He likened it to binge eating.

“Just imagine you’re sitting and watching TV and you have a bag of chips and you only want a few,” Yeager said. “But the next thing you know, the bag is empty and you’ve just been sitting there mindlessly shoving those in your mouth and they are gone. It’s like if you have a craving, whether it’s salt or chocolate, and you just can’t stop because you’re not satisfied.”

Jill Dorson tells the initially heartbreaking and ultimately inspiring story of Army veteran Dave Yeager’s recovery from gambling addiction. (@FallInPodcast, click image for story)https://t.co/KdWe5N2b32

— US Bets (@US_Bets) November 29, 2023

Mizuhara to plead guilty Tuesday

Mizuhara will appear in court on Tuesday (4 June), this time for a change-of-plea hearing. Last month, as a procedural matter, Mizuhara pled not guilty to charges of fraud and signing a fraudulent tax return. On Tuesday, after Mizuhara’s guilty plea is accepted, a sentencing date will be scheduled.

The case is being handled in the US District Court for the Central District of California. US District Judge John W Holcomb has been assigned to the case.

In March, Mizuhara turned himself in after federal investigators revealed he had stolen $17m from Ohtani to settle gambling debts. Although he has not been named in any of the cases related to the Wayne Nix illegal gambling ring, it appears Mizuhara was betting with Mathew Bowyer. Based in Orange County, Bowyer is under federal investigation, but has not been charged.

Know your customer, no credit

Unlike with illegal operators, all consumers betting with legal operators must go through the know-your-customer (KYC) process. During this vetting, consumers must share personal information, such as their birth date, social security number and email address.

Representatives from one operator agreed to share information about this process, but wished to remain anonymous.

Operators use this information to confirm that the person registering is who they say they are. Anyone on an exclusion list – voluntary or involuntary – would be flagged and rejected during this part of the process.

Once a player has gotten through the KYC process and begins betting, operators have programmes in place that could require a consumer undergo further review. Big bettors, called VIPs, generally undergo “enhanced vetting practices, which may require providing additional information regarding income, estimated net worth and other data points that require documentary proof”, the operator source said.

If Mizuhara had registered and begun placing big bets with a legal operator, there likely would have been a deeper background check, particularly as his betting increased. According to an affidavit, Mizuhara bet an average of $12,800 per wager. His biggest bet was $160,000. Either of those numbers would have caught the attention of a legal operator, the source said, and warranted further investigation.

Not all big bets are cause for concern

Legal operators do have customers who bet tens or hundreds of thousands at one time. These bettors are referred to as VIPs or “whales”. But anyone tied to a major professional US sports league would warrant a further look. All of the leagues have different gambling policies, but none allow betting on their own sport.

“We would look into their sources of funds and wealth, and the generated activities behind them,” the operator said. “Legal operators do not extend credit to customers. If Mizuhara had told us he was Ohtani’s interpreter, his account would be flagged and reviewed.

“Some big transactions aren’t nefarious. There are some people who make a lot of money and they see this as a leisure activity.”

Frequency of bets often warrants further review

Operators employ extensive risk-management controls designed to reveal suspicious betting behaviour, including high-frequency betting.

Mizuhara placed 19,000 bets over the course of about two and a half years, according to the affidavit. The frequency of the bets would likely also have been a flag for any legal operator.

If you are concerned that a friend or family member has developed a gambling problem, visit our Responsible Gambling site to review possible warning signs.

— bet365 US (@bet365_us) May 30, 2024

But “frenzy betting” or funding an account from different sources can also be an indicator of money laundering, which a legal operator’s integrity or investigations team would explore. Or it could be an indication of gambling addiction. All legal operators have teams dedicated to working with consumers who appear to have a gambling problem.

In addition, there are many companies, including Mindway AI, that work in the industry to identify at-risk gamblers. According to the company, it uses machine learning algorithms and predictive analytics to help identify potential trouble.

“For example, nightly play for one individual may not be unusual or harmful based on their lifestyle,” a company spokesperson said via email. “But for another, this could also tie in with other factors such as increasing tolerance or loss chasing which would give a stronger indication of an issue at hand.”

Operator efforts can’t stop full-blown addiction

In every legal US jurisdiction, operators are required to plainly post helpline phone numbers or websites. Most offer responsible gaming tools, including ways to cap time and money spent gambling. Yeager said anyone at the height of an addiction would not engage these tools. Nor would operator warnings stop the gambling.

Operators might send a push notification suggesting a player take a break or, in a more extreme circumstance, force a player to take a break. There might also be emails or phone calls to the player. These could range from just noting that the player’s habits have changed to cutting them off altogether.

Lionsgate is developing a TV series on the betting scandal involving Shohei Ohtani’s former interpreter, Ippei Mizuhara.

The untitled project is described as “a story of trust, betrayal and the trappings of wealth and fame.” pic.twitter.com/Jb5GtY48lD

— Front Office Sports (@FOS) May 9, 2024

In Mizuhara’s case, as the frequency of betting increased, or the cadence changed, an operator would likely have gotten its problem and responsible gambling team involved. Operators have a legal right to limit or restrict players, the source said and, if a player “displays erratic behaviour”, the operator can suspend or reduce limits.

Mizuhara: “I have a problem”

When this happens, the source said, operators limit contact with the player. Because communication happens when a consumer is in the betting app or on the platform, the operator source said, companies don’t want to encourage a player with a potential problem to log in.

According to texts in and affidavit for Mizuhara’s case, he did indicate more than once that he had a gambling problem:

On 10 March 2022: Thank you, can you put in 100k instead of 300k?” BOOKMAKER 1 responded: “U mean lower credit to 100?” MIZUHARA confirmed: “Yea, I’ll get too reckless with 300.”

On or about 24 June 2023: MIZUHARA messaged BOOKMAKER 1 stating: “I have a problem lol…. Can I get one last last last bump? This one is for real…. Last one for real[.]”

A legal operator would have cut Mizuhara off. The illegal bookie offered him more credit.

Addicted gamblers often go offshore

Yeager, who is not on Mizuhara’s care team, said limits or suspensions would have been bumps in the road for someone in Mizuhara’s situation.

“I’ve had more than a few clients who had several accounts with several operators,” Yeager said. “If they tapped out one account, they’d go to another and they would go to another and, if they tapped that out, they would go offshore.”

Betting in the black market or with an illegal bookmaker is a wholly different experience than betting in the legal market. No one is monitoring accounts or worried about problematic gambling. There are no controls, no financial checks, no real concern about where the money comes from.

In Mizuhara’s case, the illegal bookmaker offered credit. A legal US operator would never and can never do that. In some states, it is illegal to fund an account with a credit card. And some credit card companies, including Bank of America, don’t allow their cards to be used to fund gambling accounts.

“We’d rather lose a customer who is acting fishy, then keep a customer who is doing something wrong,” the operator source said. “We made that decision as a business because our reputation is so important and I think that would be the prevailing strategy.

“Whereas with an illegal operator they’d be like ok, great, you’ve got the money.”

Access to money is appealing to illegal operators

In Mizuhara’s case, as was revealed in the affidavit, the illegal bookmaker knew that Mizuhara was Ohtani’s translator. Based on texts in the affidavit, this was why the illegal bookmaker extended credit.

At one point, the bookmaker threatened to expose Mizuhara to Ohtani:

Hey Ippie, it’s 2 o’clock on Friday. I don’t know why you’re not returning my calls. I’m here in
Newport Beach and I see [Victim A (Ohtani)] walking his dog. I’m just gonna go up and talk to him and ask how I can get in touch with you since you’re not responding?

By the time Mizuhara got caught betting, he owed the illegal bookmaker $40m. He embezzled $17m from Ohtani without the baseball star’s knowledge. Ohtani publicly said he had been duped and federal investigators agree he is a victim.

After @MLB opens its investigation, @Dodgers star #shoheiotani speaks out on illegal betting scandal

Ohtani: “I have never bet on baseball or any other sports or have asked anyone to do that for me.”
Former interpreter Ippei Mizuhara “lied” when he told press Ohtani…

— iGB (@iGamingBusiness) March 25, 2024

But Bowyer, the illegal bookmaker, was counting on that connection to recoup funds. During one span, Mizuhara was paying Bowyer $500,000 per week.

In mid-April, Mizuhara learned he was to be arrested and turned himself in. He was released from custody on $25,000 bond. At that time, he was mandated to start counselling for gambling addiction. The judge also banned him from entering a casino, contacting an illegal bookmaker and contacting Ohtani.

Mizuhara may turn to another addiction

While the legal system has, at least temporarily, put an end to Mizuhara’s betting, recovery doesn’t come easy.

“Most of the time when somebody is caught, the obsession will temporarily shut down because of the fear of what happened,” Yeager said. “There will be a desire to not do this at all. Nine times out of 10 when people are doing this, nobody knows what they are doing. So they become so scared that they don’t want to do it. Inevitably over time, they are too scared to do it, but then, eventually, they try to step into it again.”

Yeager said that because Mizuhara has also been thrust under a very bright public spotlight, he may have placed his last bet. But addiction may not be behind him.

Addiction “could manifest itself in some other way… porn addiction, spending out of control, alcohol,” Yeager said. “He could be so scared that he’ll never go anywhere near gambling. But if he’s a dopamine seeker, which many struggling with addiction are, he might find something else.”

Intralot names Nikolakopoulos as new CEO after mixed Q1

Nikolakopoulos becomes CEO of Intralot with immediate effect. He will also sit on the board with 11 other members including chairman Sokratis Kokkalis and vice-chair Constantinos Antonopoulos.

Intralot announced the appointment during its ordinary general meeting, which took place ahead of publishing its Q1 results. The meeting also established a new audit committee of three independent non-executive members: Adamantini Lazari, Dionysia Xirokosta and Georgios Karamichalis.

Turning attention to financial performance in Q1, the three months to 31 March proved a mixed period for Intralot. Revenue fell 4.8% year-on-year to €85.1m (£72.5m/$92.8m) but net profit from continuing operations was higher.

Offering a brief summary of the quarter, chairman Kokkalis said the results confirm Intralot’s “stable” course. He also referenced certain refinancing that he said will support the group in the longer term.

“During Q1, the group completed the refinancing of 2024 bonds through the issuance of a bond traded on the Athens Stock Exchange and a syndicated loan with five Greek banks, on more favourable terms than those in the international markets,” Kokkalis said.

“At the same time, the results confirm the stable course of the company and consolidation of key financial indicators at the desired levels. The company also continues to pursue several important projects in North America, Australia and Brazil.”

Why was revenue down in Q1?

Taking a closer look at the Q1 results, Intralot highlighted several reasons for the decline in revenue.

Primarily, this was the result of lower revenue from licensed B2C operations in Argentina, led by unfavourable foreign currency translation following the peso devaluation in late 2023. As such, revenue here was down €4.8m, or 43.2%. However, current year data shows a 132.2% increase.

Intralot also posted a 1.6% drop in revenue from technology and support services contracts across B2B and B2G. This, it says, is again mainly due to negative foreign currency translation in Argentina. 

In contrast, in local currency, US activity remained at the same level year-on-year despite the unfavourable timing of jackpot occurrences, the impact of which was counterbalanced by strong growth in ilottery sales

There was, however, better news in terms of management contracts, with revenue rising by 8.8%. Intralot said this was driven by local market growth and market share gain in Turkey, despite the headwinds in Turkish lira.

Intralot did note that its Turkish performance was in part offset by lower recorded revenue in Morocco. This is due to a contract renewal which has a smaller contract value due to its limited scope.

Of all Q1 revenue, 92.5% came from B2B and B2G activities, with the other 7.5% being B2C. As for game type, lottery games generated 56.5% of total revenue, sports betting 22.4%, video lottery terminals 12.2% and IT products and services the other 8.9%. 

As for geographic performance, the Americas remained Intralot’s core market with €50.6m in revenue. This, however, is 13.1% less than in the previous year. Europe revenue was also down 6.7% to €14.6m, although revenue in other regions was up 21.5% to €23.3m. 

Net profit improves despite higher spending at Intralot

Turning to costs, operating expenses in Q1 increased by 18.6% to €26.9m. Intralot put this down to higher marketing spend in Turkey to support market share uptake in the country.

Depreciation and amortisation costs were also up 8.5% to €17.5m but Intralot was able to reduce interest and related costs and other financial expenses. As such, it was left with a pre-tax profit of €5.4m, down 50.7% from the previous year.

Intralot paid €400,000 in tax which, after also accounting for minority interest, means it was able to post a net profit of €3.9m. This is 25.1% ahead of Q1 in 2023.

However, it was not so positive news for EBITDA, with this dropping 10.7% year-on-year to €30.1m. This comes with a reduced margin of 35.4% on revenue.

MLB investigating Padres player, four minor leaguers for betting on baseball

MLB – and all of the US professional sports leagues – prohibit players from betting on their own sport. MLB players who bet on their own teams face a lifetime suspension. The penalty for betting on other teams is up to one year.

San Diego Padres infielder Tucupita Marcano was named by the WSJ, which also reported four minor leaguers are under investigation. It’s not clear if the players were betting legally or illegally. Marcano is being investigated for betting on baseball and the Pittsburgh Pirates. He was on injured reserve last season.

US professional sports have been under a microscope with regard to gambling of late. Former NBA player Jontay Porter was banned from the league for life on 17 April after violating league gambling rules. Porter bet on himself and his Toronto Raptors. In 2023, ten NFL players were suspended for various lengths of time for violating league wagering rules. And, last October, the NHL banned Ottawa Senator Shane Pinto for betting.

MLB hit with multiple betting scandals

The news of the MLB investigation broke on the eve of former Shohei Ohtani interpreter Ippei Mizuhara’s plan to plead guilty to fraud and one other count for stealing $17m from Ohtani to pay off illegal gambling debt. Mizuhara allegedly bet on baseball and other sports with illegal bookmaker Mathew Bowyer. Bowyer has been connected to the Wayne Nix gambling ring.

Nix is a former minor-league baseball player who ran an illegal bookmaking business in Orange County for 20 years. Bowyer is under federal investigation, but has not yet been charged. Nix is set to be sentenced in federal court in September.

Two other professional baseball players are under federal investigation in relation to the Nix ring. On 17 May, ESPN linked former Angels infielder David Fletcher and ex-minor leaguer Cody Shultz to the illegal betting ring. MLB has reportedly opened a betting investigation into Fletcher, now in the Atlanta Braves farm system.

No comment from MLB; Padres acknowledge situation

Marcano is on the injured list recovering from ACL surgery. He entered the league in 2016 when the Padres signed him as an international free agent. He made his major-league debut on 1 April 2021, but was traded to the Pirates on 26 July 2021. Last season, he was back and forth between the Pirates big-league team and its Triple A Indianapolis Indians. On 25 July 2023, he was placed on injured reserve.

Sports betting is legal in Pennsylvania and Indiana. If Marcano signed up with a legal operator using his own personal information, his account would have been flagged.

Legal operators have access to exclusion lists and professional rosters and pay special attention to accounts created by professional athletes. MLB players are within the bounds of league betting rules if they bet on other sports.

The WSJ did not name the minor-league players under investigation. The paper also reported that MLB and the MLBPA declined to comment.

“We are aware of an active investigation by Major League Baseball regarding a matter that occurred when the player in question was a member of another organisation and not affiliated with the San Diego Padres,” the Padres said in a statement. “We will not have any further comment until the investigative process has been completed.”

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Spain online gambling revenue rises to €350.7m in Q1

The Q1 total was comfortably ahead of €313.3m in the same period last year. It is also more than the €315.3m generated in Spain in the final quarter of 2023.

Casino remains the primary source of revenue, generating €167.8m in Q1, or 47.8% of all market revenue. The quarterly total was 17.0% higher than last year but 2.1% behind Q4.

Year-on-year casino growth was helped by a 15.0% rise in slots revenue and 22.2% rise in roulette revenue. Growth was also reported across blackjack and roulette.

Elsewhere, sports betting revenue amounted to €150.3m, representing 42.9% of overall revenue for the quarter. This is 15.4% higher than Q1 last year and also 31.0% ahead of Q4.

Within this market, pre-match betting activity rocketed by 588.8% year-on-year but in-play bets were down 31.7%. Other bet types edged up 1.6% while horse racing betting was down 28.4%.

As for other segments, poker revenue climbed 4.0% from last year to €28.5m, accounting for 8.1% of the quarterly total. Increases were reported across both tournament and cash games during the period.

Bingo revenue hiked 24.9% to €4.2m, or 1.2% of the whole Spain market. However, revenue from contests dropped 99.4% to around the €2,000 mark.

Marketing spend rises 14.9% in Q1

The increase in revenue comes as operators spend more on marketing. Total expenses in Q1 hit €112.8m, an increase of 14.9% from the previous year.

Of this total, €55.7m was spent on promotions, €41.8m advertising, €14.3m affiliate activity and €1.1m sponsorship. Incidentally, total marketing spend was 1.0% lower than in Q4 last year.

It was also revealed that total deposits were 15.9%% higher than in Q1 of 2023 at €1.09bn. Withdrawals climbed 13.9% year-on-year to €740.0m, while new accounts increased 33.6% to 446,586.

By the end of Q1, there were 78 licensed operators active in Spain. This includes 50 offering casino, 41 betting, nine poker, four bingo and two contests.