Northland Man Pleads Guilty to Illegal Gambling

Sports Bookmaking Operation Used Web Site, Computer Server in Costa Rica

February 12, 2010 - KANSAS CITY, MO—Beth Phillips, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., man pleaded guilty in federal court today to being a bookmaker in an illegal gambling operation that relied on a Web site with a computer server located in Costa Rica.

Michael V. Badalucco, 26, of Kansas City-North, waived his right to a grand jury and pleaded guilty before U.S. Magistrate Judge Sarah W. Hays this afternoon to a federal indictment that charges him with using a telephone, while engaged in a gambling business, to transmit wagering information between Missouri, Arizona and Costa Rica to assist in placing bets on sporting events.

Badalucco admitted that he was engaged in an illegal sports bookmaking business operated in the Kansas City, Mo., metropolitan area. Badalucco and other bookmakers provided their bettors with a 1-800 toll-free telephone number and a Web site. In order to place a wager on a sporting event, the bettor would call the number or access the Web site, then provide their account number and password. Badalucco and other bookmakers used a separate 1-800 toll-free telephone number, or the Web site, to track their bettors’ activities and account balances.

Both of the 1-800 numbers routed to a company located in Costa Rica. Under this scheme, the Costa Rican company acted as a virtual wire room for the illegal sports bookmaking operation – taking wagers and keeping electronic records of bettors’ activities and results on a computer server located in Costa Rica. The Costa Rican company did not have an interest in the outcome of the wagers, but charged the illegal sports bookmaking business a fee for managing each bettor’s account.

Badalucco and other bookmakers paid out or collected cash in person from their bettors, usually on a weekly basis.

Under federal statutes, Badalucco is subject to a sentence of up to two years in federal prison without parole, plus a fine up to $250,000. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.

This case is being prosecuted by Assistant U.S. Attorney Jess E. Michaelsen. It was investigated by the Federal Bureau of Investigation and the Kansas City Police Department.