There are many reasons why a regulated system for sports betting is good for Missouri.
Just one of them is the lesson that we can all learn from the story of a Kansas City man who used sports betting fraud to swindle dozens of people out of millions of dollars.
According to the United States Department of Justice, Matthew R. Peterson is the man behind the scheme. The 51-year-old persuaded at least 37 victims to pour about $6 million into the fake sports betting system.
Legalizing Missouri sports betting could go a long way toward making these schemes unsuccessful. Currently, the landscape of wagering money on sporting events in the Show-Me State encourages this type of criminal behavior.
Details of the $6 million sports betting fraud scheme
From 2012 to late 2016, Peterson forged spreadsheets, financial statements and sportsbook account reports to make it look like he was a talented sharp gambler. True to the Ponzi scheme tradition, Peterson took money from new investors and transferred the funds to investors involved for a longer time.
Peterson would then tell those more-tenured investors that money came from their wagers with him. As anyone would expect, he kept a good chunk of the money for himself. With the millions of dollars he stole, he made cash withdrawals, bought property and even gambled.
Peterson pleaded guilty to one count of bank fraud and one count of money laundering in September 2020. Earlier this month, a federal judge sentenced him to eight years and a month in prison. Peterson must also pay over $2.5 million in restitution to his victims.
It’s an expensive lesson for those who were involved and a harrowing warning for others. When you wager your money through illegal channels, you take a bigger risk than just losing your bet. It also should stress the need for legalization to officials in Jefferson City.
Consumer protections in regulated sports betting markets
Currently, the only options Missourians have for placing legal bets on sporting events are to leave the state. For most, that means crossing borders into Illinois or Iowa. Some people in Missouri, though, do roll the dice with offshore websites and/or local bookie services.
In an unregulated market, there’s zero recourse for bettors if the people taking the bets decide to defraud bettors. For example, there’s nothing to stop a bookie from delaying or outright refusing to pay out winnings.
A regulated market for sports betting in Missouri would provide a convenient and safe option. In the event that a dispute between a bettor and a legal sportsbook is unresolved, a consumer could contact the state’s regulatory body for assistance.
That’s just one example of the consumer protections inherent in a regulated system. Hopefully, it will spur the Missouri legislature to act on the issue sooner rather than later. Several bills are in both chambers, but all are very early in the process.
They vary greatly on certain details, but one thing they all have in common is expanding legal gambling in Missouri to include sports betting. To prevent more sports betting fraud, that can’t happen quickly enough.