Federal Judge Orders Forfeiture of $10 Mil From Bodog

A U.S. District Judge out of Baltimore last week signed an order allowing the federal government to keep $9.67 million of the $9.87 million seized from Nevada bank accounts of Bodog, one of the largest online gambling companies.   Federal authorities seized the accounts last July.  $200,000 would be returned to a credit card payment solutions company, the order stipulated. 

The forfeiture order was the second big one involving proceeds attributed to Bodog, according to Forbes.com. The first, involving some $14.2 million seized in early 2008 from accounts in banks in the southeastern U.S., was finalized last year.  The once dominant Internet gambling and poker firm has fallen on rough times over the last year.  Its colorful founder, Calvin Ayre, remains in hiding after abruptly retiring from Bodog last spring.  The firm's poker room barely maintains a top 15 position among all leading "real cash" sites.  And while Bodog seems to be slowly getting its act together in terms of proper payout structuring, the company has had a difficult time taking in new deposits.

From Forbes:

A Forbes cover story about Ayre in 2006, when he qualified for the Forbes list of the world's billionaires, was titled "Catch Me If You Can." Legislation President Bush signed later that year strengthening online gambling prohibitions shredded Bodog's giant $6 billion-a-year operation and Ayre's fortune.

It's not just the federal government that is going after Bodog, as Forbes points out. Las Vegas software maker 1st Technology filed a claim seeking to collect on a $46 million judgment it won against Bodog in a suit alleging that Bodog had infringed on its intellectual property.

It was unclear whether Bodog had since settled with 1^st Technology, believing they were backed into a corner.

1^st Tech's CEO, Scott Lewis, told Gambling911.com in December that Bodog would have no other choice but to pay monies owed in a complaint.

"1st Tech's $50M judgment (now $52M with growing interest) was reaffirmed by the U.S. Federal Appeals Court in early Oct. 2008. As you also know, Bodog requested last May that the U.S. Patent and Trademark Office (USPTO) reexamine our core gaming patent, U.S. Patent 5,564,001 (the '001 patent) as part of a blackmail attempt to get us to settle for a pittance - an attempt I rejected. The goal being that if all of the claims of the '001 patent were disallowed by the USPTO then they could (which we dispute on legal grounds) get the $50M judgment reversed. Well and behold, we received in November the first official office action from the USPTO in the '001 reexam -- and they ALLOWED four of the claims! Allowance of only one claim makes the patent reaffirmed by the USPTO - independent of the result of the other claim examinations (which we are working diligently to show were novel vs. the prior art.)  Since the default judgment against Bodog was pursuant to a broad '001 patent infringement complaint - Bodog now faces a valid $52M judgment affirmed by the U.S. Court of Appeals pursuant to a lawsuit on a patent affirmed as valid by the USPTO - this makes our judgment about as strong as you can possibly get to take this judgment for collection against assets in the U.S. and around the world - legally, it's now "game over" for Bodog."

Bodog was abruptly yanked from the Gambling911.com website last summer after it was unable to send funds, requesting instead to pay out in increments.  The world's leading sports odds and handicapping provider, Covers.com, also followed suit.

"They just didn't have the money," explains Gambling911.com Senior Editor, Payton O'Brien.  "If they are having trouble paying us how can we trust they are going to pay our readers?"

Since that time Bodog has made some inroads on the payout front but sources within the company are still working to develop new means of deposit methods.

"This is not a bad company by any means despite losing much of the talented staff that helped build the brand," said O'Brien.  "We've enjoyed a long relationship with Bodog.  They just need to get their act together.  Obviously, these latest revelations are yet another setback in the ongoing saga of Bodog."