Online bookmaker Pinnacle has rethought its plan to enter the UK’s regulated online gambling market.
On Tuesday, Pinnacle’s official Twitter feed announced that the company had “withdrawn our license application to the UK Gambling Commission.” The company said that while it remained “eager to serve the UK betting market, the decision has been made that now is not the right time.”
The company went on to say that it recognized the disappointment it was bringing to potential UK customers but assured punters that “Pinnacle remains committed to bringing its low margins, high limits and unique winners welcome policy to the UK market when the time is right.”
Pinnacle’s UK license application had been listed as ‘pending’ on the UKGC website for some time now, and the specific cause for the delay remains unknown. The company had previously expressed optimism regarding a 2017 launch for its UK-facing site, but it now appears that Pinnacle didn’t expect any regulatory breakthroughs anytime soon.
Pinnacle (under its previous incarnation Pinnacle Sports) withdrew from the UK market in 2014, but assured its UK customers at the time that it would be back “should we obtain a British gambling license in the future.”
At the time of its UK withdrawal, the Curacao- and Malta-licensed Pinnacle had already submitted its license application to the UKGC. The following year, Pinnacle changed ownership, and the new team made “expansion into regulated territories” a key plank of its business strategy.
Pinnacle appears to have shifted its focus to its new B2B sportsbook platform technology division, Pinnacle Solution, which the company unveiled last week. The company reportedly hopes to be able to market Pinnacle Solution to US companies looking to take advantage of any favorable shift in America’s sports betting laws.
Showing posts with label Pinnacle. Show all posts
Showing posts with label Pinnacle. Show all posts
October 27, 2015
The story of Pinnacle Sports is a case study in how bookmaking sites, illegal in the United States, manage to operate on American soil
Hard by the High Line, in a vintage industrial building with a Romanesque arch, lights flash on powerful computers in row after row of metal cabinets and cages. Power lines connect the equipment to diesel generators on the roof. Cables route data through the building to conduits beneath New York City streets.
This is one small corner of the Internet, unremarkable except for the confluence of two facts: Sports betting is largely illegal in the United States. And this Manhattan building, on 10th Avenue in Chelsea, is one node in a vast network used by a major offshore sports book — ever faster, ever more sophisticated and harder to track or regulate.
The network is traversed by United States customers of pinnaclesports.com, a hugely successful Internet sports-gambling company with headquarters until recently in a shopworn hotel in the tiny Caribbean island nation of Curaçao. The unlikely chief of Pinnacle Sports is a granddaughter of a former North Dakota governor who famously engaged in a bit of Cold War diplomacy with Nikita S. Khrushchev.
For years, offshore sports books like Pinnacle have used technology and other means to keep prosecutors at bay. In the United States, field agents are arrested, money is forfeited and the illegal gambling rings are seemingly dismantled. Yet they rise again, with different street soldiers and a new arsenal of deception. The one constant is the Internet, which allows for the electronic brain of these sports books to evolve, beyond the reach of American prosecutors.
This pattern raises a persistent question: Are the successes of law enforcement tantamount to cutting off a lizard’s tail only to see it grow again, and if so, is the battle even worth fighting? Is the better way — with gambling increasingly woven into the fabric of American sports — to simply legalize it so it can be regulated?
That question is playing out in the rising controversy over betting on daily fantasy sports — the now-ubiquitous business that was given life by a 2006 federal law that tried, and largely failed, to stamp out old-school sports betting. Fantasy sports received an exemption on the ground that it is a game of skill, not chance — a contention being examined by a growing number of investigators.
The story of Pinnacle — pieced together from documents and interviews as part of The New York Times’s investigation of unregulated online gambling, in collaboration with the PBS series “Frontline” — is a case study of how more traditional, and far less public, offshore sports books operate and, at least for now, survive on American soil. Indeed, experts say illegal sports betting remains a considerably larger business than its legal cousin, fantasy sports.
In a statement, Pinnacle said it “pulled out of the United States in 2007,” after the passage of the federal online gambling law, and since then had “never knowingly taken bets from the United States.” The company says it is fully licensed in Curaçao, where online gambling is legal.
However, American and European investigators have determined that since 2007, Pinnacle has had thousands of betting customers in the United States, documents show.
What’s more, using advanced Internet technology, The Times found that Pinnacle, along with other gambling sites, had quietly developed a direct digital presence in the United States, allowing it to communicate quickly with its potential customers. Speed is the currency of today’s Internet, where users expect a website rich with graphics and interactive features, but may abandon the site if it takes more than an instant to load.
How many of Pinnacle’s users are actually betting or simply visiting the site cannot be known. What is clear, though, is that by 2014, vast amounts of gambling data, once housed legally offshore, were being delivered to the United States from equipment in New York, Miami, Chicago, Dallas and elsewhere.
This represented a new and pervasive domestic presence, one that investigators have largely overlooked.
“For them to knowingly collect data in New York for the purpose of furthering a bookmaking enterprise, if that’s what they’re doing — that would be a significant exercise of brazenness on their part,” said Gerard Brave, the chief of the rackets bureau for the Queens district attorney, Richard A. Brown, who has prosecuted Pinnacle operatives in recent years; the company itself has not been prosecuted in the United States.
Mr. Brave added, “That would be very interesting to us, and we would certainly be looking into that.”
In its statement, Pinnacle said: “All content is delivered legally from Curaçao. We use U.S. traffic acceleration companies, which is fully in compliance with all U.S. laws.”
But last week, as this article was nearing publication, United States traffic to the Pinnacle website abruptly shifted from equipment on American soil to servers in Europe and elsewhere, according to an analysis by Dyn, an Internet performance company.
Each online sports book has its own DNA. Some are run by Mafia associates or are part of larger criminal enterprises. Pinnacle is different. There has been no shortage of old-time bookmaking techniques, including operatives making street drops with bulging bags of cash. But some of its senior operatives have had an unusual social conscience, attuned to gay and environmental groups, and campaigns to protect whales, dolphins and children in need. And it has often been ahead of the pack, and of investigators, in its use of the Internet.
To understand how betting rings employ the Internet to navigate around legal traps requires a journey to places that, for most people in the online age, are far more foreign and remote than a Caribbean island — places where the virtual and physical worlds intersect.
This is one small corner of the Internet, unremarkable except for the confluence of two facts: Sports betting is largely illegal in the United States. And this Manhattan building, on 10th Avenue in Chelsea, is one node in a vast network used by a major offshore sports book — ever faster, ever more sophisticated and harder to track or regulate.
The network is traversed by United States customers of pinnaclesports.com, a hugely successful Internet sports-gambling company with headquarters until recently in a shopworn hotel in the tiny Caribbean island nation of Curaçao. The unlikely chief of Pinnacle Sports is a granddaughter of a former North Dakota governor who famously engaged in a bit of Cold War diplomacy with Nikita S. Khrushchev.
For years, offshore sports books like Pinnacle have used technology and other means to keep prosecutors at bay. In the United States, field agents are arrested, money is forfeited and the illegal gambling rings are seemingly dismantled. Yet they rise again, with different street soldiers and a new arsenal of deception. The one constant is the Internet, which allows for the electronic brain of these sports books to evolve, beyond the reach of American prosecutors.
This pattern raises a persistent question: Are the successes of law enforcement tantamount to cutting off a lizard’s tail only to see it grow again, and if so, is the battle even worth fighting? Is the better way — with gambling increasingly woven into the fabric of American sports — to simply legalize it so it can be regulated?
That question is playing out in the rising controversy over betting on daily fantasy sports — the now-ubiquitous business that was given life by a 2006 federal law that tried, and largely failed, to stamp out old-school sports betting. Fantasy sports received an exemption on the ground that it is a game of skill, not chance — a contention being examined by a growing number of investigators.
In a statement, Pinnacle said it “pulled out of the United States in 2007,” after the passage of the federal online gambling law, and since then had “never knowingly taken bets from the United States.” The company says it is fully licensed in Curaçao, where online gambling is legal.
However, American and European investigators have determined that since 2007, Pinnacle has had thousands of betting customers in the United States, documents show.
What’s more, using advanced Internet technology, The Times found that Pinnacle, along with other gambling sites, had quietly developed a direct digital presence in the United States, allowing it to communicate quickly with its potential customers. Speed is the currency of today’s Internet, where users expect a website rich with graphics and interactive features, but may abandon the site if it takes more than an instant to load.
How many of Pinnacle’s users are actually betting or simply visiting the site cannot be known. What is clear, though, is that by 2014, vast amounts of gambling data, once housed legally offshore, were being delivered to the United States from equipment in New York, Miami, Chicago, Dallas and elsewhere.
This represented a new and pervasive domestic presence, one that investigators have largely overlooked.
“For them to knowingly collect data in New York for the purpose of furthering a bookmaking enterprise, if that’s what they’re doing — that would be a significant exercise of brazenness on their part,” said Gerard Brave, the chief of the rackets bureau for the Queens district attorney, Richard A. Brown, who has prosecuted Pinnacle operatives in recent years; the company itself has not been prosecuted in the United States.
Mr. Brave added, “That would be very interesting to us, and we would certainly be looking into that.”
In its statement, Pinnacle said: “All content is delivered legally from Curaçao. We use U.S. traffic acceleration companies, which is fully in compliance with all U.S. laws.”
But last week, as this article was nearing publication, United States traffic to the Pinnacle website abruptly shifted from equipment on American soil to servers in Europe and elsewhere, according to an analysis by Dyn, an Internet performance company.
Each online sports book has its own DNA. Some are run by Mafia associates or are part of larger criminal enterprises. Pinnacle is different. There has been no shortage of old-time bookmaking techniques, including operatives making street drops with bulging bags of cash. But some of its senior operatives have had an unusual social conscience, attuned to gay and environmental groups, and campaigns to protect whales, dolphins and children in need. And it has often been ahead of the pack, and of investigators, in its use of the Internet.
To understand how betting rings employ the Internet to navigate around legal traps requires a journey to places that, for most people in the online age, are far more foreign and remote than a Caribbean island — places where the virtual and physical worlds intersect.
April 16, 2015
Pinnacle Sports confirms Magnus Hedman as majority shareholder
Touchbet ltd owner Magnus Hedman has been confirmed as the majority buyer of Pinnacle Sports, as his new enterprise looks to extend its presence within the European sports betting market.
Pinnacle Sports CEO Paris Smith revealed to industry news source EGR Magazine that Hedman had become the company’s majority shareholder. The CEO stated that the company felt no pressure to reveal its buyer, and that it had chosen to reveal Hedman at the appropriate time for its operations.
Smith has further credited Hedman with helping Pinnacle Sports’ gain it’s Malta Gaming Authority License. Pinnacle’s CEO said that she looked forward to working with Hedman who had big objectives for the operator.
Hedman who is the owner of B2B risk management supplier Touchbet, has further been identified as the majority buyer of UK spread betting firm Sporting Index for a reported £40 million from HgCapital.
The Sporting Index deal is pending approval from the Financial Conduct Authority. It is believed that Hedman beat-off competition from Betgenius and GVC Holdings for the acquisition of Sporting Index.
Pinnacle Sports CEO Paris Smith revealed to industry news source EGR Magazine that Hedman had become the company’s majority shareholder. The CEO stated that the company felt no pressure to reveal its buyer, and that it had chosen to reveal Hedman at the appropriate time for its operations.
Smith has further credited Hedman with helping Pinnacle Sports’ gain it’s Malta Gaming Authority License. Pinnacle’s CEO said that she looked forward to working with Hedman who had big objectives for the operator.
Hedman who is the owner of B2B risk management supplier Touchbet, has further been identified as the majority buyer of UK spread betting firm Sporting Index for a reported £40 million from HgCapital.
The Sporting Index deal is pending approval from the Financial Conduct Authority. It is believed that Hedman beat-off competition from Betgenius and GVC Holdings for the acquisition of Sporting Index.
March 04, 2015
Pinnacle Sports outlines strategic vision under new ownership
Pinnacle Sports CEO Paris Smith is excited to take the sports betting operator forward under new ownership, following its sale to undisclosed buyers.
Smith outlined that the new owners of the Curacao licensed sports betting operator had ambitious plans and a strategic visions for its unique business model which has proven a popular destination for high value sports betting consumers.
Last month Pinnacle Sports governance confirmed the sale of its majority stake holdings to undisclosed buyers, through a sale conducted by Las Vegas based M&A firm Alternative Trading Partners (ATP)
Speaking for the first time since the takeover of the new buyers, CEO Paris Smith commented “I am extremely excited about working with our new major shareholder to realise a shared vision for Pinnacle Sports, which includes significant product enhancement and expansion into regulated territories. Though this deal denotes an important change for Pinnacle Sports, our customers should rest assured that the fundamental principles that make the brand so unique will not be compromised.”
Smith concluded that it would be business as usual for the sports betting operator, as senior management looks forward to a successful and positive 2015.
Smith outlined that the new owners of the Curacao licensed sports betting operator had ambitious plans and a strategic visions for its unique business model which has proven a popular destination for high value sports betting consumers.
Last month Pinnacle Sports governance confirmed the sale of its majority stake holdings to undisclosed buyers, through a sale conducted by Las Vegas based M&A firm Alternative Trading Partners (ATP)
Speaking for the first time since the takeover of the new buyers, CEO Paris Smith commented “I am extremely excited about working with our new major shareholder to realise a shared vision for Pinnacle Sports, which includes significant product enhancement and expansion into regulated territories. Though this deal denotes an important change for Pinnacle Sports, our customers should rest assured that the fundamental principles that make the brand so unique will not be compromised.”
Smith concluded that it would be business as usual for the sports betting operator, as senior management looks forward to a successful and positive 2015.
July 10, 2014
Pinnacle Sports: Brazil bigger than Euros and South Africa combined
Phil Hudson, Acquisitions Manager at Pinnacle Sports, discusses his firm’s decision to open up the World Cup Final to $1million bets.
Do you anticipate the World Cup Final to be your biggest ever betting market?
Yes, we fully anticipated volume to exceed both Euro 2012 and World Cup in 2010 combined, with live and mobile components of that making significant contributions.
How has business been during this tournament?
The volume received is living up to our expectation, and with $1million limits for the final, we hope to end the tournament on a real high. Not only are we accepting $1million bets, but our customers also have ave the option to rebet at that stake as well.
Can you envisage rolling out the higher betting limits to other events?
Well our limits for the 2014 Super Bowl were $250k, NBA hit $100K and we regularly go to $500k for the Champions League so we are certainly looking to push the boundaries on limits across all our major sports.
Why persevere with the $1 minimum bet size? Isn’t this almost costing you money?
Though we have a wholesale model we are keen to acquire customers from right across the betting spectrum, as we believe all bettors should seek to maximize value. Given we don’t have specific sign up incentives this is cost effective, and our message is about educating bettors – especially those who are new to gambling – rather than just preaching to the converted.
Why do you think other bookmakers run scared of hefty bets? Is the art of balancing books a lost one? Or just out of fashion in favour of risk taking?
I cannot comment on the reasoning behind it, but bookmaking has certainly become homogenized with the risk-management aspects in many cases outsourced. Pinnacle Sports do all risk-management in-house, and it is the strength of this expertise that enables us to provide a low margin, high limits model, where winners are welcome back, unrestricted.
Do you anticipate the World Cup Final to be your biggest ever betting market?
Yes, we fully anticipated volume to exceed both Euro 2012 and World Cup in 2010 combined, with live and mobile components of that making significant contributions.
How has business been during this tournament?
The volume received is living up to our expectation, and with $1million limits for the final, we hope to end the tournament on a real high. Not only are we accepting $1million bets, but our customers also have ave the option to rebet at that stake as well.
Can you envisage rolling out the higher betting limits to other events?
Well our limits for the 2014 Super Bowl were $250k, NBA hit $100K and we regularly go to $500k for the Champions League so we are certainly looking to push the boundaries on limits across all our major sports.
Why persevere with the $1 minimum bet size? Isn’t this almost costing you money?
Though we have a wholesale model we are keen to acquire customers from right across the betting spectrum, as we believe all bettors should seek to maximize value. Given we don’t have specific sign up incentives this is cost effective, and our message is about educating bettors – especially those who are new to gambling – rather than just preaching to the converted.
Why do you think other bookmakers run scared of hefty bets? Is the art of balancing books a lost one? Or just out of fashion in favour of risk taking?
I cannot comment on the reasoning behind it, but bookmaking has certainly become homogenized with the risk-management aspects in many cases outsourced. Pinnacle Sports do all risk-management in-house, and it is the strength of this expertise that enables us to provide a low margin, high limits model, where winners are welcome back, unrestricted.
June 18, 2012
Pinnacle buys bust Federated Sports & Gaming
Pinnacle Entertainment has announced that it is buying the Heartland Poker Tour and its assets, including poker website domain names, for $4.5 million.
According to reports, Pinnacle successfully bid $4.5 million this week in a bankruptcy auction for the assets of bankrupt sister companies Federated Sports & Gaming and Federated Heartland. A Pinnacle spokesperson confirmed the purchase and price.
The Federated companies own both the Heartland Poker Tour and the Epic Poker League. The companies filed for bankruptcy in February in Maryland.
Pinnacle, a creditor in the bankruptcy case, is expected to convert its $2.1 million debt claim into equity, potentially reducing its cash outlay as the winning bidder to $2.4 million.
Pinnacle didn’t mention the Epic Poker League in it’s announcement about the Heartland Poker Tour, however Bluff Magazine is reporting this is the case.
“We will obviously need some time to assess all of our new assets and brands,” Pinnacle spokesperson Kerry Andersen said.
But she added, “These are well-known, respected brands and we are excited about the opportunity to expand them.”
The Heartland Poker Tour is a live, televised poker tournament series that made 17 stops in 15 states in 2011. Pinnacle’s River City and Lumiere Place casinos in St. Louis also hosted Heartland Poker Tour events in March.
Heartland is in its eighth season and broadcasts events on hundreds of network television, cable and satellite stations throughout the United States, Europe and the Caribbean.
“The acquisitions provide Pinnacle Entertainment with one of the poker industry’s most powerful brand and intellectual property portfolios, as well as the opportunity to expand the Heartland Poker Tour and more extensively integrate its events into our network of casino properties,” Pinnacle CEO Anthony Sanfilippo said in a statement. “In addition, the acquisitions provide several elements that will help advance our online gaming strategy.”
According to reports, Pinnacle successfully bid $4.5 million this week in a bankruptcy auction for the assets of bankrupt sister companies Federated Sports & Gaming and Federated Heartland. A Pinnacle spokesperson confirmed the purchase and price.
The Federated companies own both the Heartland Poker Tour and the Epic Poker League. The companies filed for bankruptcy in February in Maryland.
Pinnacle, a creditor in the bankruptcy case, is expected to convert its $2.1 million debt claim into equity, potentially reducing its cash outlay as the winning bidder to $2.4 million.
Pinnacle didn’t mention the Epic Poker League in it’s announcement about the Heartland Poker Tour, however Bluff Magazine is reporting this is the case.
“We will obviously need some time to assess all of our new assets and brands,” Pinnacle spokesperson Kerry Andersen said.
But she added, “These are well-known, respected brands and we are excited about the opportunity to expand them.”
The Heartland Poker Tour is a live, televised poker tournament series that made 17 stops in 15 states in 2011. Pinnacle’s River City and Lumiere Place casinos in St. Louis also hosted Heartland Poker Tour events in March.
Heartland is in its eighth season and broadcasts events on hundreds of network television, cable and satellite stations throughout the United States, Europe and the Caribbean.
“The acquisitions provide Pinnacle Entertainment with one of the poker industry’s most powerful brand and intellectual property portfolios, as well as the opportunity to expand the Heartland Poker Tour and more extensively integrate its events into our network of casino properties,” Pinnacle CEO Anthony Sanfilippo said in a statement. “In addition, the acquisitions provide several elements that will help advance our online gaming strategy.”
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