IRS, gaming agents try to intercept sports messenger bettors

The Strip's high-tech casino sports books buzz with more energy during Super Bowl week. The boozy chatter of fans increases as Sunday's game approaches.

They'll bet millions, those fans. But they're not the real gamblers. They're the squares, the suckers.

The real players are represented by messenger bettors, who place wagers on behalf of groups who risk more on an NFL game than your house used to be worth.

Their dance begins each morning in sports books from here to the Caribbean. They take their cues from some of the sharpest guys in the country, shop for the right numbers, make their plays and update the office. Collectively they move millions on any Sunday, an even greater fortune during Super Bowl week.

Thanks to a recent bouquet from "60 Minutes," super savvy Billy Walters remains America's best known and arguably most successful sports bettor, but these days plenty of groups use computers and handicappers. Most also employ small armies of messengers to move their money.

Gaming Control Board Chief of Enforcement Jerry Markling knows the dance as well as anyone.

He's perfectly aware messenger betting is as common as it is illegal. It's a misdemeanor under state law, but it's hard to enforce because agents have to prove the messengers are being compensated for their activity. That takes an investigation and the use of precious resources that arguably might be better spent on possible felonies. (The messenger wagering law, Markling adds, doesn't apply to typical bettors who run wagers for the gang at the office or local sports bar. It's intended for professional groups.)

"What we are concerned about are those runners who are working for illegal bookmakers, either here or throughout the country, who are being paid to facilitate the illegal bookmaking," Markling says. "That's the reason the illegal messenger betting statute was created in the first place."

But what if the messenger bettors represent more than professional gamblers or baggy-pants bookmakers, and are linked to organized crime, a feeding frenzy of street loan sharks, a sports-betting Ponzi scheme or an international drug cartel?

It wouldn't be the first time. The recent mega-bust of more than 100 members and associates of New York's five mob families was riddled with gambling and bookmaking violations.

In October 2009, 30 people were arrested on illegal sports betting, money laundering and tax charges in a multi-agency law enforcement case that stretched from Boca Raton to Flamingo Road. That operation grossed an estimated $250 million a year.

The Las Vegas connection is nothing new, but from the look of things, it's back on the radar with the IRS.

"We have reinvigorated our partnership with Nevada Gaming Control in an effort for us to address the money laundering and tax evasion aspects of large scale, illegal sports wagering," IRS Las Vegas Field Office Special Agent in Charge Paul Camacho says. "These operations often use runners to lay off bets in Vegas."

The IRS is bound to ask questions. Here's one: How do messenger bettors gamble so much but still manage to avoid filling out all those tax disclosure forms?

While Gaming Control agents are stuck investigating misdemeanors, the IRS can hit much harder.

"A word of caution to those acting as runners for bookies: You are obligated to inform the casino who you are conducting the transaction on behalf of," Camacho says. "Withholding information will cause a false Currency Transaction Report (CTR) to be filed."

That's no wrist slap.

"Causing a false CTR is a felony," he says. "Federal forfeiture statutes could also apply, which would make the vig the worst bet in town."

Even with the best gambling information available, messenger bettors know it's tough to win.

Now they have to worry about how they play the game.

John L. Smith's column appears Sunday, Tuesday, Wednesday and Friday. E-mail him at Smith@reviewjournal.com or call (702) 383-0295. He also blogs at lvrj.com/blogs/smith.