As was widely expected, Costa Rica-based offshore sportsbook operator 5Dimes is exploring options for making a legal offer to join the regulated US sports betting and gaming industry.
The firm has entered into a settlement arrangement with the US Attorney for the Eastern District of Pennsylvania, having stopped taking bets from US customers last month, gaining eligibility to apply on a legal basis to enter the company.
This will be achieved under a new corporate framework, free and clear of any limitations on the use or transfer of its properties and in full compliance with US legislation. The State of Delaware has already formed a new corporate company, 5D Americas LLC.
5Dimes formerly worked under the complete and exclusive control of its creator, William Sean “Tony” Creighton, for several years. Prior to his kidnapping and murder in 2018, the US Department of Justice, specifically the EDPA, had both 5Dimes and Creighton under federal investigation. His widow, Laura Varela, took responsibility for the finances of 5Dimes after the death of Creighton, although she did not exercise day-to-day control over the operations.
“It has been a very difficult two years for me and my family,” said Varela. “But today marks a pivotal turning point and a fresh start for me and the 5Dimes brand, as well as a milestone for the legalization of sports gaming in the US. My husband’s death was tragic, but he loved 5Dimes and all of its loyal customers. Now his spirit will be able to live on as the 5Dimes brand begins this new chapter.”
She added: “Along with a team of trusted advisors, I am exploring how we might relaunch 5Dimes as a legal sportsbook and casino in the legal, regulated US market to continue serving our many loyal customers.”
Varela voluntarily approached the EDPA in the spring of 2019 to address any previous illegal activity carried out by 5Dimes. This settlement arrangement is a direct product of her partnership with the EDPA to address and clear the business of the criminal investigation.
Varela identified fraudulent properties associated with the company as part of the deal and agreed to surrender more than $46 m in value to the government. The collaboration did not require the disclosure of any customers’ details or identities.
5Dimes was mandated by the agreement to stop serving US customers by 30 September 2020. 5Dimes stopped taking bets from US customers as of September 21, 2020, to accommodate the requirement, until it is reconstituted in the US as a new, legal and licenced company. By September 25, 2020, the firm told its players to suspend their accounts and move their balances.
Those funds will be transferred to Epiq, a third-party claims administrator who will attempt to deliver the funds to the account holder, by any customer who has not demanded a withdrawal of their funds by September 25, 2020. Any customer funds that are not claimed by 30 September 2021 will be forfeited to the US government in accordance with the agreement.
As noted in the settlement agreement, the long inquiry by the government concluded that Varela was not involved in any of 5Dimes’ unlawful acts. The agreement specifically clarifies that there are no legal limits on the use of the 5Dimes brand’s properties or properties to pursue potential alternatives, including, but not limited to, re-constituting the 5Dimes brand to be licenced in the US and internationally to perform legal, supervised gaming activities.