Perhaps nothing better speaks to the need for legal and regulated sports betting in the Hoosier State than last week’s arrest of a bar owner for allegedly taking bets on sporting events.
According to reports, the Indiana Gaming Commission spent more than four years investigating an alleged illegal gambling business operating out of the Tuxedo Bar in Washington, Indiana. The owner, 59-year-old Roger Padgett, was arrested in a raid last Wednesday on four counts of “professional gambling” and was released on….wait for it…$5,000 bond.
He was charged with the state’s least-severe level of felony, potentially punishable by 6-30 months in jail and a fine up to $10,000.
Four-plus years investigating an alleged crime that is so low-level that it results in effectively no bond? Residents of Indiana should be very displeased with the law of the land in the state that led to the mammoth waste of taxpayer-funded resources.
Furthermore, that the size of the alleged operation in terms of handle or revenue wasn’t reported also suggests a relatively small-time illicit business.
Background on the bust
The Indiana Gaming Commission received anonymous tips in March 2014 about the gambling going on at the Tuxedo Bar, according to a report from The Washington Times Herald.
After receiving the tips, undercover officers surveilled the bar, which reportedly included examining the bar and Padgett’s personal garbage. Agents found what they say is evidence of bookmaking, documents that allegedly contained sports betting records.
The first trash pull that contained alleged sports betting records came in the fall of 2014.
Other details of the investigation included undercover state officials placing bets with Padgett, reportedly throughout the course of the entire investigation.
Additionally, authorities served three separate warrants for phone records related to Padgett’s alleged sports betting operation. Authorities identified 33 people involved with betting with Padgett. None of those individuals were arrested, per reports.
Problem with the law
It’s ultimately not the Indiana Gaming Commission fault for such a mind-boggling waste of resources. The law in Indiana is outdated, to put it mildly, failing completely at dealing with a massive sports betting black market.
There are proposals in the works this year to legalize sports wagering for the state’s licensed gambling facilities. Under plans currently on the table, a sports betting operation like the one allegedly at the Tuxedo Bar would still be a black market operation.
With that said, Indiana should regulate sports betting in such a way that the white market it creates is more attractive to bettors than an underground book or bookie. It’s simply terrible public policy to have a white market alongside a vibrant black market that is only hindered when Indiana gaming agents or local authorities receive tips and then launch investigations.
Having the white market naturally phase out the black market involves allowing online/mobile wagering, as well as remote account registration, to make Indiana’s legal sportsbooks competitive with offshore gambling sites. It also involves a tax rate that isn’t overly burdensome, as well not mandating any royalties or data monopolies for the sports leagues that would make legal books less competitive in the form of higher prices on wagers.
The extension of credit that black market bookies often offer is one thing that will keep them popular indefinitely for a minority of players, as states have so far been uninterested in allowing that kind of relationship between a licensed operator and a customer. Indiana shouldn’t completely abandon enforcement actions against illegal sports betting operations, but it should move as far away as possible from the need for the kind of investigation conducted against the Tuxedo Bar.
Indiana’s 2019 sports betting talks are still in their early stages, and it’s unclear what a bill capable of passing the House and Senate would ultimately look like. A hearing on a proposal is slated for Thursday.
