Online Gambling Is Illegal in the United States, but That Has Not Stopped Owner Calvin Ayre

clevfan · 06-23-2006, 01:15 PM

The Most Successful Online Gambling Web Site
Online Gambling Is Illegal in the United States, but That Has Not Stopped Owner Calvin Ayre
By MARTIN BASHIR
June 23, 2006 - - A battalion of bulletproof vehicles speeds around the dusty streets of Costa Rica.

Security is paramount -- the president is in town.

The president, that is, of the Bodog Entertainment Group, whose Bodog.com is the most successful gambling Web site on the planet, where you can bet on horses or play endless games of poker.

Calvin Ayre, 45, was raised on a pig farm in Saskatchewan, Canada. He is now the founder and sole owner of Bodog, and he likes nothing more than to promote his business -- always accompanied by beautiful women.

"Bodog is about having fun," Ayre said as he relaxed at his compound where four bikini-clad models whose outfits just managed to contain the company's eight-letter logo waited nearby.

"It's no different than what you'll see if you watch a James Bond movie. It's basically the philosophy is that we sell fantasy. We're in the entertainment business. It's pretty much identical to what you see when you go to a movie like a James Bond movie. He's got the similar strategy. And it's attractive to people. People like it," he said.

They certainly do. Last year, Bodog.com, in only its sixth year of business, turned over about $7.3 billion in wagers and gaming. What's most surprising of all is that it is illegal to run an online gambling business in the United States. That hasn't stopped Ayre.

Instead, he has arranged a complex international business model that means he doesn't fall foul of the laws of any particular jurisdiction.

His core business is based on two floors of an office complex in Costa Rica, with employees running the main gambling business -- setting odds and taking bets. His revenue is processed through the Royal Bank of Scotland in London where payments are received and winnings are paid out. None of his transactions take place within an American financial institution.

So although most of his clients are based in the United States, Ayre maintains that none of his financial processes are subject to this country's laws or system of taxation. He has a term for his carefully conceived business. He calls it "jurisdictional arbitrage."

"I think that any astute businessperson looks for arbitrage. This is merely jurisdictional arbitrage. ... What I was doing was structuring a business so that everything that I do is legal. That's what I was doing," he said.

As a result, it is difficult to assess Ayre's actual wealth. There are no published accounts and, for one so given to self-promotion, he is remarkably reluctant to discuss the details -- especially when it comes to the vexed issue of paying taxes, as indicated in this excerpt from our interview.

MARTIN BASHIR: Do you pay tax?

CALVIN AYRE: Yes. I pay taxes all over the place.

MARTIN BASHIR: Do you pay tax in America?

CALVIN AYRE: I don't operate in the United States.

MARTIN BASHIR: But you take money from --

CALVIN AYRE: United States has chosen to not allow our industry to operate in the United States. And they voluntarily made that decision. It's not up to me to force myself into the United States to pay taxes there. The countries that I do operate in, I pay taxes in them.

MARTIN BASHIR: Do you pay personal tax in Costa Rica?

CALVIN AYRE: In Costa Rica? Personal income tax? We're going to not talk about my personal tax structure. That's another area that --

MARTIN BASHIR: So I'll assume you don't.

CALVIN AYRE: Pardon?

MARTIN BASHIR: I'll assume you don't.

CALVIN AYRE: We're just not going to talk about my personal financial situation. I will talk about what I do from a corporate perspective, though.

MARTIN BASHIR: Go ahead.

CALVIN AYRE:We pay taxes everywhere. We pay taxes everywhere we operate. We pay taxes.

MARTIN BASHIR: So you pay taxes on your business here in Costa Rica then?

CALVIN AYRE: Correct. We pay transaction taxes. We pay income taxes. We pay licensing taxes. And we pay taxes in a number of other jurisdictions as well -- including Canada.

MARTIN BASHIR: Do you pay personal taxes in Canada?

CALVIN AYRE: Stick to corporate stuff for now.

MARTIN BASHIR: Do you pay personal tax in Canada?

CALVIN AYRE: Corporate. Right.

MARTIN BASHIR: So you don't pay personal tax in Canada and you don't pay personal tax in Costa Rica.

CALVIN AYRE: I'm just not prepared to talk. The interview is going to be us talking about Bodog and what Bodog is about.

Ayre is well-rehearsed in the school of controversy.

After completing a master's in business administration in Seattle, he accepted his first job at Bicer Medical Systems in Canada -- a company that made heart valves.

Soon after he took the job, it was reported that he had broken the rules -- selling shares without releasing a prospectus and also moving shares without filing insider trading reports. He was subsequently banned for 20 years for running a company on the Vancouver Stock Exchange. Despite accepting the sentence, he says he wasn't guilty.

"I didn't actually do all the stuff that I agreed to settle," he said. "I made a settlement with them for economic reasons, just to get it out of my life and so that I could move on with my business."

After leaving Bicer Medical Systems, he stumbled upon a newspaper story that would prove remarkably fortuitous. The story featured the activities of notorious bookmaker, Ronald "The Cigar" Sacco, who had established an offshore betting business in the Dominican Republic.

"What he said," Ayre said, "was that he was running a phone sports betting operation out of the Dominican Republic because it was legal to do that where he was. And then I said it sure would make a lot more sense to be doing that over the Internet."

The idea for Bodog.com was born at that moment. Meanwhile, Sacco went to prison after pleading guilty to money laundering.

It's estimated that Ayre now has more than half a billion dollars in personal assets following the success of his online business -- though he chooses not to give specific details.

He's now developing ideas for a reality TV show and is also on the verge of releasing music on a soon-to-be-launched Bodog record label.

While many in Congress continue to condemn gambling, he is shameless about his business activities and his success at the game.

"I think gambling is an excellent form of entertainment. I'm extremely proud to be in the gambling business," he said. "I love it. I love gambling myself, and I love being in the gambling business."

http://abcnews.go.com/Nightline/story?id=2108601&page=1

dutchBulldog · 06-23-2006, 03:13 PM

Scum bag through and through.

The Actuary · 06-23-2006, 03:17 PM

How anyone can believe anything this guy says is beyond me.

If not for the poker, his little scheme would be done already.

orbit · 06-23-2006, 03:48 PM

Isn't it a little bit of a stretch to say "whose Bodog.com is the most successful gambling Web site on the planet"

I would think Party Poker or Sportingbet are bigger than Bodog? Even Pinnacle has gotta be up there as well

Total Square · 06-23-2006, 04:25 PM

i think cal's next stunt is thinking that if he gets popped, then it will be a good thing for business. i read the following:

Bodog.com is hosting an "industry-related" conference in Las Vegas next month that would make him a nice juicy target for law enforcement officials who wish to capture him.

"Additionally I am in the US and run through their computers every week. If anyone wanted to grab me there is no reason to wait for the conference for this. If I do get arrested, you will find that the market in the UK in on-line gaming will crash and there will be a massive defection of directors and officers causing a lot of operational problems for companies already having a difficult time dealing with Bodog."

But an arrest of Ayre would by no means result in the end to Bodog.com. Quite the contrary. In fact, it would have little effect according to Ayre.

"It would have no impact on the Bodog operations since they are private and are structured to run without my active involvement. It would, however, have a very positive branding effect in that it would make me even more famous and would increase the profile of the Bodog brand by giving me world wide media attention and a large soap box to stand on for my messaging and I would be out of jail in a day."

A law enforcement official, speaking on anonymity concurred.

"If the US government really wanted to go after (Calvin) Ayre, they could arrest him as soon as he steps foot in the United States. They could get him for "tax related" issues."

looks to me as though he is challenging the feds to nab him...and if he really thinks he will be out of jail in a day, then he ought to look up the case of gene haas this past week.

what will cal have to say when the judge says: remand, no bail???

clevfan · 06-23-2006, 05:23 PM

TS, did he really say that??? If so, it's just plain stupid of him! What arrogrance this man has, and it will likely get him in trouble sooner rather than later.

lebowski_ · 06-23-2006, 07:05 PM

Has not knocked off Joe Francis #1 ranking of my Scumbag List but definelty in my top 5

KingYao · 06-23-2006, 07:51 PM

Bashir comes through like a dickhead.

nfleqbc · 06-23-2006, 09:53 PM

<div class="FTQUOTE"><begin quote>Originally posted by: clevfan

MARTIN BASHIR: So you pay taxes on your business here in Costa Rica then?

CALVIN AYRE: Correct. We pay transaction taxes. We pay income taxes. We pay licensing taxes. And we pay taxes in a number of other jurisdictions as well -- including Canada.

</end quote></div>

According to Forbes, he exploits a loophole to not pay any CR taxes, fwiw.

<div class="FTQUOTE"><begin quote>It's estimated that Ayre now has more than half a billion dollars in personal assets following the success of his online business -- though he chooses not to give specific details.</end quote></div>

Forbes says he has no personal assets (everything is in Bodog's name to avoid taxes) other than Bodog. They also, using Sportingbet's price/handle, estimate Bodog is worth a billion.

homedog · 06-23-2006, 10:17 PM

<div class="FTQUOTE"><begin quote>looks to me as though he is challenging the feds to nab him...and if he really thinks he will be out of jail in a day, then he ought to look up the case of gene haas this past week. </end quote></div>

Not a good thing to do. He thinks he is bigger than everything out there. Won't be long before it all comes down on him.

biffsnaked · 06-24-2006, 01:49 AM

Homedog. What happened to this Gene Haas guy? Ayre is a walking dead man, he just hasn't acknowledged how bad it is going to be for him. He continues to hang himself with comments like Bodog will keep humming even if he's taken down. Won't spend more than a day in jail, eh? His sentencing judge will have all his arrogant comments available for perusal when the day comes. What does Ayre think, he can pass the whole thing off as a mistake? That is how he explained his Bicer Medical stock fraud in Vancouver. By the way, the reporter who mentioned that fraud in last week's paper has been banned from the Bodog conference in Vegas. No, ol' Cal is most definitely screwed. I know this for a fact. Nothing makes the public happier than when a filthy rich, egotistical, mysogonistic, bisexual, drug dealing stock fraudster and all around scumbag gets sent to jail. They are most definitely going to throw the book at "The Face Of Online Gambling". His best move would be to disappear, cause he won't do well in da joint. And if you want a bodyguard in there, it'll cost something other than money. Ahaa ha ha haa. What a bizarre story it will be. From the cover of Forbes to jailhouse bitch. Couldn't happen to a nicer guy. Run, Cal, run!![img]i/expressions/face-icon-small-happy.gif[/img]

Juice · 06-24-2006, 03:41 AM

Nothing makes the public happier than when a filthy rich, egotistical, mysogonistic, bisexual, drug dealing stock fraudster and all around scumbag gets sent to jail. They are most definitely going to throw the book at "The Face Of Online Gambling".

I believe in time he will become the face of the internet bust period. Many companies and corps are over valued on the net I sense. Many behind them are no different than the person Biff describes but every bit as lucky. They were the first time 10 years ago as well as when it came crashing down just 3 years later.

Things are no different now.

I stand by what I say when I say it wont be that easy as he is not a citzen here and the US's ablity to declare another countries lawful laws, unlawful and thus persecutable by them has never really been tested. It is selective persecution in this country and it does not matter where you are from but I stand by my statement of there are American owners they could grab just as easy and have an easier time by half. The feds have stacked the law to say that they govern you anywhere in the world you go and if you participate in a event the say is illegal when you get back here you go to jail for 20 years for not doing what you are told.
You can not win that argument no matter what. Why go the hard way?

Today it would be Costa Rica. Tommorrow they would have to go after the UK whom are a long way from paying taxes here to with all those publicly traded companies on AIM and other markets.

Just one mans opinion.

Total Square · 06-24-2006, 01:18 PM

i wonder what happened...cal got cut last night, and i had to sit thru 3 other stories:

bio-town indiana
wronful execution in texas (what a shock)
cant even remember the third

i loved the false release from them last week about cal being on thepeoples magazine list of bachelors...for some reason, i didnt quite see his mug on the list

Michael Cash · 06-24-2006, 01:25 PM

TS,

My old lady gets people and he was in fact in there. It was just a small little box with a pic and a paragraph or so of text. The release covered basically everything that was mentioned in the story, it wasn't a feature.

MC

Total Square · 06-24-2006, 01:30 PM

he didnt make the web site mc

i looked...and looked...and looked

all the stories i read were online and had a link

Vietbet · 06-24-2006, 01:43 PM

Are they even the most successful operation in their building?

Total Square · 06-24-2006, 01:44 PM

<div class="FTQUOTE"><begin quote>Originally posted by: Vietbet

Are they even the most successful operation in their building?</end quote></div>

they think they are [img]i/expressions/face-icon-small-happy.gif[/img]

Michael Cash · 06-24-2006, 02:00 PM

Not sure about that TS, he did make it to the print mag though but it was just a small piece. There were a lot of people in there addition to the top stars. Looks like they picked everyone that had over 5-10 million and wasn't married even if they looked like my hairy ass. [img]i/expressions/face-icon-small-smile.gif[/img]

MC

JC · 06-24-2006, 10:30 PM

Everyone repeat after me. Nationality is not a defense, nationality is not a defense.

I agree that he doesn't have any personal or corporate tax liability in the US. However, his sportsbook puts him in the exact same jeopardy I was in 8 years ago, maybe even more so. Not only is his nationality not a legal defense, it will certainly make it more difficult if not impossible to get bail. I met more than one person in my travels who was automatically considered a flight risk because they held non-US passports.