Although Wednesday’s historic settlement between the U.S. Department of Justice and offshore sportsbook 5Dimes potentially clears the way for the sportsbook’s entry into the U.S. legal market, the embattled offshore internet sports betting operator may face an uphill battle in gaining licensure on the state level.
As part of a $46.8 million settlement that absolves owner Laura Varela of criminal wrongdoing, 5Dimes agreed to discontinue a practice of accepting wagers from U.S. customers out of its Costa Rica-based office, and reorganize under a new corporate structure. Beginning in at least 2011, 5Dimes facilitated millions in illegal wagers from U.S. customers, according to a non-prosecutorial agreement reached with the Justice Department, while attempting to conceal the location and the nature of the funds. The company has agreed to forfeit more than $30 million in assets, including a 1948 George Mikan rookie basketball card, and pay a fine of $15 million.
While attorneys for Varela believe the settlement provides a clear path for the company’s transformation into a regulated U.S. sportsbook, critics of the offshore market argue that it will be unwise for regulators to rubber-stamp a license for 5Dimes, which has already incorporated as 5D Americas LLC in Delaware. Such a move, they contend, could open the floodgates for other offshore operators accused of unscrupulous business practices to orchestrate a move into the U.S. market.