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Let’s be honest, sports betting hasn’t always been the “cleanest” of industries. This predates online or mobile app betting. It was long banned and bettors, wanting to get some action any way they could, resorted to betting illegally.
Hell, before sports betting was legalized in mass after the Supreme Court overturned (PAPSA) in 2018, there were offshore sportsbooks raking in billions of dollars — and they still are in some cases.
So illegal betting has been happening, but it’s become a more common news story nowadays. You see professional players getting caught betting and being suspended. You see the world’s biggest baseball player in the world being robbed blind because an interpreter is betting illegally (and losing ungaudy amounts too). These stories are out there, but still, one involving a slew of people in Alabama caught the world by surprise.
It’s a surprise story because of how big the operation got and from what seemed like “average Joes” from Alabama. There are some new developments out of the story we had to update you on so keep on reading!
Red44 Ring Creates Shockwaves Around The Country
Back in January 2023, federal prosecutors in the United States announced they had charged 11 men. The cause? Running an illegal betting organization called Red44. The indictment was filed in Birmingham, Alabama — which is where many of the men involved called home. But don’t think this was just a local enterprise. No, no, when the feds get involved, you know this thing spread nationally and even internationally.
These are the allegations as of right now. Yes, they’re allegations because the court case hasn’t moved forward yet (more on that later). Anyway, the feds charged the 11 men with tax evasion. According to them, Red44 accepted hundreds of millions of dollars in bets but the organization failed to pay millions of dollars in taxes off it.
The original indictment reads 56 pages long, and it’s a good one — reading like a thriller novel at times. We’ll give you the main details here. It starts with a Birmingham man named Timothy Pughsley, who started Red44 decades ago (before smartphones were even a thing). The site had servers in Costa Rica, where betting is legal and regulated.
Pughsley recruited more bookmakers into the operation. Prospectors allege he used a multi-leveled marketing (MLM) scheme to pay the bookmakers and recruit more bettors. For those unaware, MLM schemes are illegal in their own right. How it works is bookmakers are paid per member they attract, and then those members can lure others using the same structure, and it’s just an endless cycle of fresh bettors from there. A ponzi scheme essentially.
Another allegation goes that Pughsley boasted about Red44 having about 7,800 bettors in one week during football season in 2019. He went on to say the average loss per bettor was $983. This was all said publicly at a conference in Chicago that same year. Based on those numbers, prosecutors believe Red44 was producing around $14.9 million that year, which would have them on the hook for $6.8 million in taxes.
That was in 2019. Betting only boomed in the years after as more and more states legalized sports betting. In 2021, two years before being busted, prosecutors believe Red44 brought in about $352 million in wagers, which would make them liable for $7 million in taxes. See what we mean? This wasn’t a small operation, hence why the feds got involved.
Most Plead Guilty To Charges
That indictment is now almost two years old. However, there are new developments to the story. In November 2023, eight of the 11 people indicted pleaded guilty to federal charges. For the record, here’s all who caught charges:
- Timothy J. Pughsley, 51, of Birmingham
- Christopher Burdette, 30, of Chelsea
- Nathanael Burdette, 36, of Birmingham
- Jonathan Lind, 44, of Birmingham,
- Thomas V. Zito, 57, of Vestavia
- Christopher Donaldson, 46, of Trussville
- Gary L. Rapp, Jr., 44, of Lakeland, Tennessee
- Mark Giaquinto, 50, of Upton, Massachusetts
- Matthew D. Voorhees, 47, of Englewood, Colorado
- David Richards, 38, of Las Vegas, Nevada
- Joshua Gentrup, 36, of Athens, Georgia
The only three left are Pughsley (the ring leader of the whole thing), Rapp, and Giaquinto are still left standing. They are expected to stand trial for the countless crimes of tax evasion and money laundering.
Not The Only Alabama Betting Scandal
Isn’t it ironic how Alabama sports betting is still illegal — one of only 11 states without it after Missouri legalized this past November — yet two massive scandals happened inside the state?
The head baseball coach of the Rolling Tide, Brad Bohannon, was fired for providing inside information on a game involving his team (and an injured pitcher). He subsequently was banned from the NCAA for 25 years.
Gee, it almost makes you think that if Alabama just allowed betting in the first place, there would be fewer scandals since folks wouldn’t have to take extreme measures to bet. Not only that, but the state could collect tax revenue from all of it. Sounds like a double-whammy win to us but Alabama lawmakers are hanging tight against it.
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