Full History and Start Up of Sportsbook.com

Sportsbook.com is the most well-known gambling site in the US
market. In the early Internet days, their advertisements could
be found on many mainstream websites. Websites like ESPN.com,
Yahoo Sports, and others were never shy about referencing
Sportsbook.com in their articles. This company has an amazing
history that would take, and also make, a great book to cover.
Here we offer a brief summary of their story as an attempt to
get it on the web.

Sportsbook.com Origins

The most interesting fact about sportsbook.com is that as a
billion dollar gambling site, it has for the most part kept its
true ownership well concealed. The desire to do so isn’t
surprising considering the legality of offering sports betting
to the United States. What is surprising is that no one has ever
slipped-up or even really questioned the ownership in much
detail. We provide some facts below regarding their startup.

PlayersOnly.com Came First

In 1996, a tall redheaded Irishman from Canada, 26-years old
at the time, landed in Margarita Island (a Venezuela territory)
where he started both a bookmaking business and a bar. His name
was Patrick Callahan, the bar was Fat Boys, and the bookmaking
business was Players (later named PlayersOnly.com).

Mr. Callahan was by no means the first to set up a bookmaking
business offshore. In fact, the
history of William Hill and
bookmaker.eu will show that he was a very late player in this
regard. What was unique came in January of 1998 when he became
the first to accept credit cards. His competitors relied on
mailed postal checks, cash agents, and/or Western Union to
settle. He actually not only accepted credit cards, but he also
paid via a choice of check or bank transfer.

How did he pull this off? We can’t tell you for sure, but
Patrick Callahan did surround himself with people experienced in
creating shell companies and hiding money. Whether he founded
the company or not is unsure, but a well-known investor, John
Vipulis, is rumored to have been a major shareholder. There are
some connections to point out:

Ameridebit founder Andris Pukke is a long-time family friend
of John Vipulis. He was the best man at his wedding, and his
father is John Vipulis’ godfather. Andris Pukke co-owned Villa C
Acquisition Co., LLC (“Villa C”) with Patrick Callahan who
purchased his share for $2,150,000. The connection goes deeper
in an earlier divorce case. Pukke’s wife produced a letter
signed by Patrick Callahan with a July, 1997 date showing he
owned 3.5% interest in Internet Opportunity, a company that
owned PlayersOnly. In a January, 2011 confession, which landed
him in prison for 18 months, Andris Pukke finally confessed to
this ownership.

A quick note on Ameridebt: this was an infamous non-profit
credit counseling company. If you lived in the US and had credit
card debt, you probably remember their television commercials
and Internet advertisements. They promised quick settlement of
credit card debt and the end of harassing phone calls, etc. The
company collected $172 million in upfront fees from around
300,000 distressed clients, most of which is said to have funded
Andris Pukke’s lavish lifestyle. They were sued by the Federal
Trade Commission (FTC) in 2003 and filed for bankruptcy. From
here, Andris Pukke has a long history of legal battles over
hiding money, using shells, and similiar actions.

Of course it’s mere speculation, but Andris Pukke certainly
was experienced with credit card dealings, and John Vipulis had
the venture capital background to at least provide tips on the
structure needed to pull it all off. In order to be as unique as
the first to accept credit cards for US sports betting, one
might need to make some questionable contacts. There’s no
evidence to suggest Andris Pukke was ever more than an early 3%
shareholder. Meanwhile, John Vipulis has a very clean track
record, and his involvement in this business is also
speculative.

The question now goes back to Patrick Callahan. How did a
man, who just a couple years earlier was running a bar and a
small bookmaking business, grow so fast as to be able to develop
a gambling site that was an early entry into online betting, and
then obtain the most desirable domain name in the industry (sportsbook.com)?
Let’s take a look at who owned the domain before the company he
managed acquired it.

SportsLine USA – Original Sportsbook.com Owners

The original owner of the sportsbook.com domain name was a
massive company named SportsLine USA. Back on June 1, 1995, they
launched sportsline.com, the first website to cover live scores,
sports news, game previews, and so on. (To avoid confusion,
while CBS Corporation was once an investor in this site, they’ve
been the full owners since December of 2004.)

The founder of SportsLine USA, Michael Levy of Fort
Lauderdale, Florida received initial funding from the kpcb.com
group. He then forged alliances with major US sports leagues,
player associations, and superstar athletes such as Michael
Jordan, Shaquille O’Neal, Tiger Woods, and Wayne Gretzky among
others. After lining up additional private investments from
Reuters, TCI, US West and NY Life, in 1997 it was taken public
after raising $332 million. During the Internet boom from
1998-2000, their market cap routinely exceeded $1 billion.

Steve Budin Offered Sportsbook.com

On October 1, 2007, the book “Bets, Drugs, and Rock & Roll:
The Rise and Fall of the World’s First Offshore Sports Gambling
Empire” was published. The main author is Steven Budin who
founded an early offshore Costa Rican Sportsbook called SBD
Global. He claims his company’s programming, which never made it
live, is the basis for all online sports betting sites. Anyone
familiar with the
history of Intertops.eu will notice that this
book contains exaggerations.

To give a little warning, Budin is in the tout business
(selling sports picks). He and his partner, Al Demarco (real
name All Rolli), own dozens of websites featuring so-called
handicappers such as Brandon Lang (real name Brandon Link) who
wrote the forward to the book. Brandon is, of course, the
handicapper Matthew McConaughey depicted (a Fake/Hollywood
done-up version) in the movie Two for the Money (2005). These
guys get paid big bucks to appear larger than life, so again,
expect exaggerations in the book.

In the book, Budin claims his company, SDB
Global was making $20 million a year gross: $10 million a year
(net) in gambling profits. Their programmer, William Ramirez,
was working on getting the website’s online betting
functionality ready for a March, 1998 launch when they were
offered the chance to purchase the domain name Sportsbook.com
for $1,000,000.

Steve Budin explains that the domain was owned by Sportsline
USA (sportsline.com) who was negotiating to sell their website
to CBS. Owning a gambling domain was a potential hang-up, and
they were in a hurry to sell. Budin agreed to the purchase;
however, there were logistics to work out. His fear was that
SportsLine was a US company and selling a gambling domain for $1
million would draw attention. He suggested he purchase $1
million in advertising and they give him the domain for free.

This deal was pending final approval when Steve Budin was
indicted by US authorities on bookmaking charges. He returned to
the US where he settled by paying a large fine and agreeing to
close the company. Taking advantage of his misfortune, another
company started, a not so reputable spinoff called SBG Global,
still operational today. Budin left the gambling business for
good, missing out on the lucrative sportsbook.com deal.

Sportsbook.com Becomes a Gambling Website

In November 1998, sportsbook.com came online using the same
software and having the same banking methods, etc. as
PlayersOnly.com, launched in May of 1998. Could this have been
the software Steve Budin was speaking of? It would fit the
timeline that Budin claims. He had a goal of being live by
March, 1998, but this is speculation at best. However, we do
know that a Costa Rican programmer had been close to a completed
project to be ready when Budin closed SBD Global.

Patrick Callahan & Sportsbook.com / CBS Involvement

In March of 1999, ESPN.com published an article quoting
NCAA’s executive director Cedric Dempsey. The topic was his
concern that the CBS Network, that broadcast their games, had
ties to the Sportsbook.com gambling site.

The following day, CBS announced they were unaware of the
relationship between SportsLine USA and Sportsbook.com.
Meanwhile, Sportsline.com’s founder Michael Levy claimed his
company was leasing the URL to a company based in Margarita
Island, called Global Internet, that was using it to operate a
gambling site. He claimed that despite CBS owning 20% of his
company, he was unsure if he had informed them of the lease.

It was during the reporting of this situation that the name,
Patrick Callahan, first appeared in print next to the
sportsbook.com as opposed to PlayersOnly.com. During these 1999
reports, he was mentioned as being a 28-year-old Canadian
citizen and the manager of Global Internet. Some interesting
facts from the media reports at the time include:

• Sportsline USA was publically-traded, yet no mention of Sportsbook.com, or
  the revenue generated from the lease, were included on the
  public financial statement.
• Sportsline USA was operating with a near $1 billion market cap; but their
  founder, while declining to say how much money they were paid
  for the lease, said, “We make money on it. It’s a nice URL. It’s
  worth our while or we wouldn’t go for it.“
• Patrick Callahan, then identified as the manager, claimed the company
  was making considerable profit and had around 50,000 customers
  at the time.
• Sportsbook.com didn’t lease only the domain, but SportsLine USA
  was also providing personnel and equipment to help manage the
  site.
• Sportsbook.com was the primary advertiser on other SportsLine
  USA-owned websites such as Vegas Insider.

Finally, there came the oddest statements: SportsLine USA
founder Michael Levy claimed he had many chances to sell the
sportsboook.com domain name, but he believed the company would
make more money long term by leasing it. Callahan said his
company already planned to make another bid to purchase the
domain in six more months, when it would be worth much more.
This is odd, because it isn’t something anyone serious about buying a domain name
would casually say to the media. To outsiders, it appears as the
start of a cover up of the fact that SportsLine USA was running
a gambling site.

Editor’s note: A bit off topic, but when the idea of CBS
owning a gambling site hit mainstream media, there was a rush of
sportsbooks looking to profit from it. In no time at all, there
were sites such as CBSSportsbook.com, CBSBetting, etc. The most
aggressive one that fooled others into believing it was CBS was
a sportsbook called Casablanca, using the URL betCBS.com. It was
eventually sued by the CBS Network owner Viacom, and after a
legal-battle, they changed their domain name to WagerWeb.com.

Patrick Callahan the Owner or Manager?

The fact is, no one really knows if Patrick Callahan was a
manager or shareholder, nor from where he got his money.
However, he has been “named” as the man who brought present-day
processing to online betting sites. No doubt he did an excellent
job managing the company; but how many shares he owned, who else
owned shares, and much of the company’s remaining early history
are, and probably always will be, a mystery to mainstream media.

Sportsbook.com Corporate Years

In case you haven’t guessed, we just concluded the early
history of Sportsbook.com. From mid-2001 to late-2006, they were
owned by a well-known public corporation traded on the London
Stock Exchange.

Sportingbet Purchases Sportsbook.com

In July 2001, Sportingbet, an Alderney-based gambling company
publicly traded on the London Stock Exchange, purchased Internet
Opportunity Entertainment Inc., Oak Ventures Corp., and all the
sports betting related business of the group. The transaction
listed the primary assets as:

• sportsbook.com
• playersonly.com
• wallstreet.com

The business was described as having recently moved their
headquarters from the Caribbean to Gibraltar. The risk
management, customer service, and accounting functions took
place from Margarita Island, Venezuela, the call center business
was in Dublin Ireland, with hosting and licensing operating in
Antigua. It was reported that these websites had turnover of $435.4
million, a gross margin of $42.1 million, and a net profit of
$4.9 million. The group had 347,650 registered accounts of which
approximately 70,000 had placed bets during the most recent
three-month period.

The financial aspects of the deal involved an initial
consideration of $51.25 million paid in cash, convertible and
non-convertible loan notes, and shares (no breakdown provided).
There was also a casino licensing deal built in and other
potential performance incentives that could cause the amount
paid in the future to increase.

Sportsbook.com Thrives Under Sportingbet

Sportsbook.com was already operating with the perfect domain
name, and it had a spotless track record for timely payments. It was
known as the only site where credit cards were approved nearly
100% of the time. Although their market-share continued to grow
during 2002 and 2003, it was the online poker boom that made
sportsbook.com the mega gambling site it is today. In 2004,
Sportingbet Plc purchased one of the Internet’s largest and
first online poker sites, ParadisePoker.com. They then
integrated this poker room with both sportsbook.com and
sportingbet.com, creating one of the Internet’s first seamless
3-in-1 gambling sites. At Sportsbook, players could bet sports,
play casino games, and enjoy multiplayer poker all from a single
gambling website.

In 2005, they did amazing work with branding despite using a
generic one-word domain name. Their marketing campaign was
called “Everyone Bets.” In 2005, this featured Brooke Burke as a
celebrity spokesperson, then best known as the former host of
Wild On! from the E! Network. In 2006, she was replaced with
actress Nikki Cox, currently playing the character Mary Connell
on the hit television series Las Vegas.

Sportsbook.com revamped their affiliate program, making it
one of the best in the industry. Packed with a long history of
timely payouts, great credit card processing, corporate
ownership, branding, marketing, and celebrity endorsements, they
won numerous industry awards. The most prestigious were most
likely their 2005 and 2006 back-to-back wins of “Best U.S.
Sportsbook” by industry magazine eGaming Review. Just when it
seemed nothing could stop their momentum, the US passed a law
that saw publicly-traded companies scramble out of the US market
in fear of lawsuits from shareholders.

Sportsbook.com Sold to Jazette Enterprises Limited

On October 12, 2006, Sportingbet PLC sold all their US
customers to a then unheard of company, Jazette Enterprises
Limited (JEL), for $1.00. This is actually a bit misleading as
it involved discharging liabilities amounting to approximately
US$13.2 million, which presumably Jazette inherited; it also
saved them the cost of shutting down the business. This move was
sparked by the passing of the Unlawful Internet Gambling Act.

The terms of the sale stipulated that if President George
Bush failed to sign the bill into law, the deal would be
rescinded with Jazette receiving $500,000 in consideration.
There was a further stipulation that Jazette could not accept
non-US players for a period of two years and could not accept
players outside North America for an additional year. Included
in the sale were all US customers, the domains Sportsbook.com,
PlayersOnly.com, and the white label business.

Sportsbook.com Continues to Grow

While many predicted UIGEA would be a huge blow to
sportsbook.com, this proved not to be the case. No one is really
sure who owns the companies Jazette or Domain Holdings, which
now own sportsbook.com and related gambling sites; and even with
the loss of Paradise Poker, the company Sportsbook never skipped
a beat.

Immediately following the change to a US only brand,
Sportsbook partnered with a then relatively unknown poker
network called Cake Poker: now owned by Lock Poker and called
the Revolution Gaming Network. After taking this network to the
top of US poker, they moved to the Merge Network in April of
2010. Although not confirmed, rumor has it that they had
purchased this network in late January of 2010.

Today, Sportsbook.com remains one of the most trusted
gambling sites in the business. At a time where others have
trouble processing credit card payments, they boast of an over
95% acceptance rate and have many other banking options as well.
Their poker room is the largest that accepts US players, and
they keep a low profile from US authorities by integrating their
sportsbook.ag domain into their strategy. If you’re looking for
a safe and secure site at which to wager, Sportsbook is
certainly a solid option to consider.