Here's what I think is the most accurate explanation of why pinnacle is done...

[pags11]

jellybean, sure I'd be happy to shut down 60% of my business overnight just for the hell of it... ...c'mon dude, it's got to be something more...

[imgv94]

I have a theory as to why the feds are so down on gambling that I don't think I've seen addressed yet. If you notice in previous discussions as to how people felt comfortable letting sportsbooks hold $50K+. Think about that for a minute....... That means they're using sportsbooks as bank accounts basically and we all know the US GOVT hates offshore bank accounts. I read somewhere that if you want to guarantee an IRS audit, just check the box on your tax return that you have an offshore account with more than $10k The idea that they're missing tax revenue due to people hiding money there is a huge factor.

I'm willing to guarantee FINCEN is watching to see where the large movements of money go from Pinnacle. I'm not saying 99% of us have anything to be concerned about, but there are those that probably should be. You may call me crazy or paranoid.......but I may be more accurate than most of you want to believe.

This is a solid post and should be read by everyone here.

Exactly the reason why the U.S hates offshore gambling.

[SBR_John]

I've checked that box for the last 7 years and never had any contact by the IRS(knock on wood).

It is possible even very possible that they were contacted in some way by some division of law enforcement. But the last 7 years have shown us that the Feds don't go making deals at the US Attorney level and I don't think that happened here either.

[increasedodds]

Why would Pinnacle care if some agents were busted? That doesnt make them any more illegal in the DOJ's eyes than a book with no agents and as long as their principles stayed offshore, what the hell was the DOJ gonna do about it?

Sean

[pags11]

I also agree with starion's theory...

[The Judge]

The State of the Online Gambling Industry (Part 1 )
written April 15, 2007

Ever since the Unlawful Internet Gambling Enforcement Act (UIGEA) was passed last October, there have been notable changes effecting the entire Internet gambling sector.

In fact, the first significant event occurred months before the passage of this bill, when arguably the largest online sports book collapsed, failing to pay out thousands of gamblers who were owed money by them.

On July 18, 2006, when customers tried logging on to the Betonsports web site, they received the following message:

"IN LIGHT OF COURT PAPERS FILED IN THE UNITED STATES, THE COMPANY HAS TEMPORARILY SUSPENDED THIS FACILITY PENDING ITS ABILITY TO ASSESS ITS FULL POSITION. DURING THIS PERIOD NO FINANCIAL OR WAGERING TRANSACTIONS CAN BE EXECUTED. FURTHER INFORMATION WILL BE POSTED ONCE THE COMPANY IS IN A POSITION TO DO SO."

Since then, BOS has permanently closed its doors and faces numerous criminal charges filed in the United States.

Perhaps more shocking, was the sudden and unexpected closing of Pinnacle Sports to US citizens.

The announcement was not made however, until after players from the US tried to sign into their account on the morning of January 11, 2007 only to find a message letting them know they could no longer place bets.

Pinnacle Sports has been one of the oldest and most reputable sports books online.

The announcement of their withdrawal from the United States came as a big surprise due to the timing. Most online gambling sites either had already decided to continue accepting bets from US citizens, or they quit the US market when the UIGEA law passed. The timing of their withdrawal was confusing and made little sense to Internet gambling professionals.

The most common explanation that nobody wants to talk about is that Pinnacle Sports' closing wasn't really a voluntary one at all.

What sports book would ever dream of turning away millions upon millions of dollars due to Super Bowl wagering which was just a few weeks away?

The most plausible explanation dates back a couple of months before Pinnacle closed its doors to US citizens.

27 people were indicted in November of 2006 on Internet gambling charges in Queens County Supreme Court, New York. The leader of the operation, James Giordano, has pleaded guilty and is awaiting trial.

It is believed that at least one of the 27 people arrested had an affiliation with Pinnacle Sports.
In fact, a prominent free lance writer for the 'New Yorker' magazine, namely Evan Ratliff told EOG the following:

"While I was working on a story involving this case, particularly their Playwithal Internet site, the DA who was prosecuting these individuals tipped me off."

"She instructed me to turn on my computer in the early hours of the morning. I believe I was one of the first to see that Pinnacle Sports alerted gamblers they were no longer taking bets from US citizens"

Therefore, I believe that Pinnacle Sports worked out some sort of a deal with US prosecutors to protect individual(s) and perhaps the parent company as well from facing legal charges and consequences.

Six days after Pinnacle stunned the realm of online sports betting, another shock even more devastating was about to transpire.

Neteller, a publicly traded third party payment processor located in Canada had been by far the most popular, convenient and most widely used method for gamblers to fund sports betting accounts with and to make withdrawals from as well.

Shortly after the passing of the UIGEA, and specifically on January 17, 2007, Neteller displayed the following on its web site:

US member update: "Due to recent US legislative changes and events, effective immediately, US members are no longer able to transfer funds to or from any online gambling sites."

Now Neteller, too, along with BetonSports, suddenly had legal issues filed by the US feds against the founders of Neteller who aren't even US citizens and who had sold their company several years ago, largely believed to protect them from future prosecution.

The collateral effects due to the closing of Pinnacle and Neteller to US citizens within one week of each other have had profound and permanent impacts on Internet sports betting.

The industry will never be the same.

Part 2-Coming Soon

written by Kenneth B. Weitzner --EOG

[BigBollocks]

I missed this one in January, but thanks to LTProfits had it brought to my attention. This is about as well-written and well-reasoned piece about the pinnacle situation as you'll ever find, and is quite deserving of a bump for those who might have also missed it...