In the story, Shohei Ohtani’s interpreter, Ippei Mizuhara. he initially told ESPN, the two men logged into Ohtani’s bank account together on eight or nine occasions in 2023 and transferred increments of $500,000 to Mathew Bowyer, an alleged illegal bookie under federal investigation. In the story Ohtani told the public days after Mizuhara recanted his initial claims and was fired by the Dodgers, the performer stole money to pay off his gambling debts.
Both versions of the story raised a question that perplexed the general public: Why would a bookmaker extend a line of credit of at least $4.5 million to someone who said he was receiving an $85,000 salary like Los Angeles Angels performer? The scenario was easier to understand for those familiar with the inner workings of gambling markets.
“Credit is the lifeblood of illegal gambling houses,” said Chris Grove, a gambling industry entrepreneur and investor. “Therefore, we should not be surprised that an illegal bookmaker uses credit to attract a high-value customer, especially when that customer has proven that he is good at it.”
The scandal has captivated the baseball industry and the sports world at large at a time when the game has become intertwined with sports consumption. Two-time American League MVP Ohtani, 29, who recently signed a 10-year, $700 million contract, said he never bet on baseball or any other sport, and has not been accused of any crime.. He described himself as a victim deceived by a friend. “Ippei has been stealing money from my account and telling lies,” he said through his new interpreter, Will Ireton. Major League Baseball has opened an investigation. The IRS’ Los Angeles field office has partnered with the Department of Homeland Security to investigate Mizuhara and Bowyer.
The story also opened a portal for the public into the less understood world of illegal gambling. Since the Supreme Court ruled on a 1992 federal law that effectively banned sports betting in most states, most of the country has gained access to legal gambling on games. However, a 2022 report from the American Gaming Association estimated that Americans bet a total of $63.8 billion at illegal sportsbooks and unregulated offshore sites in 2021. So why do these sportsbooks and offshore operations maintain such a prosperous business?
The appeal of credit (the ability to bet money you don’t actually have) is the main reason, as emerged from interviews with lawyers, businessmen, researchers and professional gambling players. These experts framed most of their comments in the broader world of illegal gambling, rather than the saga of Ohtani and Mizuhara. But they also pointed to a variety of additional factors driving gamblers toward sportsbooks, including the promise of privacy, the ability to avoid taxes on winnings, the removal of artificial limits on betting and the enduring appeal of convenience.
“Ohtani’s situation is a good reminder that there is still a thriving illegal market, because there are still people in the illegal market willing to offer things to consumers that the regulated market can’t or won’t,” Grove said.
The prosecution team pursuing Bowyer is the same group that investigated a different gambling ring run by former minor league baseball player Wayne Nix. reported the Los Angeles Times. One of the dozen people charged in that investigation is former Dodgers outfielder Yasiel Puig, who has pleaded not guilty. The Nix probe demonstrated the modernity of the practice. The concept of meeting a bookie in a dark alley or dive bar is outdated. Nix used a network of bookmakers who collected bets through a website and phone line, according to the Washington Post.
Convenience adds to the appeal, especially when placing an illegal bet only requires clicking a few buttons rather than walking into a casino in Las Vegas, one professional gambler said. “The last thing a guy wants to do is go to Circa Sportsbook every day and deposit $20,000 on (games),” Ingram said. “Some people just text you or go to the website.”
Bookmakers often maintain a personal relationship with their customers, forgiving certain bets, offering free game credits or lamenting about “bad beats,” the unfortunate outcomes that unite all gamblers. “They offer customer service that sometimes can’t be offered through an app,” said Timothy Fong, co-director of the UCLA Gaming Studies Program.
Fong, a psychiatrist, studies the causes and treatment options for gambling addicts. Some of those who bet through illegal betting houses want anonymity. Others don’t want to pay taxes on a potential jackpot.
Daniel Wallach, a Florida sports betting and gaming attorney who previously wrote for The Athletic, suggested that a sense of loyalty can keep punters intertwined with bookmakers. “Those patterns can be difficult to break, given all the incentives,” Wallach said. “There may be better lines, better odds” for a regular player.
Sportsbooks also offer bets that legal betting companies can’t or won’t, depending on state laws or exposure risks. Some states, for example, prohibit betting on their local college teams, and in the context of the March Madness college basketball tournaments, the NCAA is seeking to further restrict college betting; Last week, NCAA President Charlie Baker urged states to ban betting on college athletes entirely. Bookmakers exist in a world unconcerned with such developments, which can be attractive to punters looking for specific types of stocks that legal books might not offer.
“Instead of the 30 types of cereal they offer,” Fong said, “I can get 100 different types of cereal that my bookie offers.”
Spectators watch NCAA March Madness Tournament games at the Borgata Casino sportsbook in New Jersey this March. (Wayne Parry/Associated Press)
In the case of Mizuhara and Ohtani, location matters. California is one of 12 states without legal sports betting. In 2022, voters rejected a pair of competing ballot initiatives to keep things that way, showing how difficult it will be to legalize gambling amid a costly and often bitter fight between tribal casinos and private betting companies. Proposition 26 would have legalized in-person gambling at tribal casinos and racetracks. Proposition 27 would have allowed online sports betting.
By the time voters rejected those initiatives, Mizuhara was already facing more than $1 million in gambling debts, he told ESPN. Mizuhara said he had met Bowyer at a poker game in San Diego in 2021. To boost his business, Bowyer told associates that Ohtani was his client, the Los Angeles Times reported. Diane Bass, Bowyer’s attorney, said her client had no contact with Ohtani.
In many cases, an existing customer must refer a player to a bookmaker, and the existing customer sometimes receives a referral bonus when the new player bets. If the new player does not pay the bookmaker when required, the referral will be cut; Peer pressure often serves as a sufficient first resort for gamblers to continue paying their gambling debts.
Bookmakers also offer incentives for customers to pay in the form of free play or other forms of free bets; The bettor is incentivized to pay and uses the free bets to continue chasing his losses and make profits again. In cases where bettors are deeply in debt, bookmakers accept partial payments or assign customers weekly or monthly payment plans. Payments are frequently made through cash transfer apps like Venmo or PayPal, although sometimes the cash is sent by mail, depending on the size of the transaction.
Mizuhara told ESPN that Bowyer extended him a line of credit that allowed his losses to stretch into the millions, which experts described as typical for a sportsbook that was confident in the bettor’s ability to pay.
Bookmakers can make a lucrative living, especially if they can attract a few deep-pocketed, high-value customers, assuming they can stay out of the authorities’ crosshairs. Gamblers themselves rarely, if ever, face legal consequences for betting at illegal bookmakers; The government has generally sought to prosecute operators, not customers, when pursuing illegal gambling. At the same time, however, a lack of government oversight can also hurt big-winning gamblers. If the bookmaker decides not to pay out a significant win, players will have little choice.
Some of the largest unregulated gambling operations are completely outside the jurisdiction of US state regulators, because they are based in foreign countries. These so-called “offshore” sites are often modeled to look like regulated American sportsbooks and have domain names like “.lv” to suggest that they are based in Las Vegas (in that example, lv means Latvia). These typically don’t offer the personal experience that illegal US-based bookmakers do, they typically don’t offer credit, and transferring cash in and out can be difficult; Some players use cryptocurrencies to transact with these books. A small subset of punters have placed bets on sites like these without knowing they were illegal, having stumbled upon one of a number of unregulated sites offering the appearance of ownership.
“If you look at it, it’s clean, it’s fresh, it looks kind of regulated,” Fong said. “It doesn’t look any different than a cheap version of DraftKings or FanDuel. He has all the bets on it.” The unwitting consumer, Fong explained, “has no idea that they are actually engaging in unregulated and unprotected gambling activity.”
If they do well enough (and can be sure they will get paid), gambling with an illegal operation can also be lucrative for the bettor; In addition to taxing a player’s winnings, regulated websites sometimes also limit the action of players perceived as winners, experts said. The bookmaker can offer more freedom, certainly in terms of taxes but also limits. “In the illegal market, you probably won’t find restrictions on how much you can bet,” Wallach said.
The evidence suggests that Mizuhara was far from a winning bettor. Mizuhara described himself as an addict unable to recover his losses. In those cases, the use of credit also helps the bookmaker.
“What they do is let these people accumulate money they don’t have,” said the professional player. “It is very predatory. It’s really sad, because that’s how a lot of the world works, in the game.”
(Top photo of Mizuhara and Ohtani at a Los Angeles Rams game in December: Sean M. Haffey/Getty Images)
