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Botched Illegal Gambling Case Prompts Lawsuit Against Prosecutors

George Miller

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Botched Illegal Gambling Case Prompts Lawsuit Against Prosecutors
Reading Time: 4 minutes

Eight people who were the subject of one of the largest illegal gambling stings in Hawaii history are suing Honolulu Prosecuting Attorney Keith Kaneshiro and one of his top deputies, Katherine Kealoha, saying they committed retaliatory and malicious prosecution after one of the plaintiffs compared Kaneshiro to the mobster John Gotti on TV news in 2013.

 

Also named as defendants in the case are Vernon Branco, who was a lead investigator for the prosecuting attorney’s office in the gambling case, and the City and County of Honolulu.

Yoshimura is the lead plaintiff in the lawsuit, which was filed in U.S. District Court of Hawaii on Friday. He is the owner of PJY Enterprises, a company that used to distribute Product Direct Sweepstakes machines to arcades around Oahu.

Yoshimura had been named along with some of his co-plaintiffs in a 414-count criminal indictment in 2014 that was tied to the use of the sweepstakes machines as alleged gambling devices.

All the charges were eventually dismissed, however, after a series of missteps by the Honolulu Prosecuting Attorney’s Office, and in particular Kealoha, who was the head of the agency’s Career Criminal Division at the time, and Branco, who was the lead investigator on the case.

The allegations in the recently filed lawsuit stem from a series of police seizures of Yoshimura’s sweepstakes machines that began in September 2012.

According to the lawsuit, Kaneshiro, in cooperation with the Honolulu Police Department, seized 190 sweepstakes machines from a number of arcades throughout Oahu, from Ward Avenue in Honolulu to Waipio.

Yoshimura filed a lawsuit against Kaneshiro, HPD and its police chief, Louis Kealoha, over the seizures. The case eventually made it to federal court.

Yoshimura also took to TV to challenge Kaneshiro directly, saying among other things, that he believed he was on firm legal footing, and that he welcomed criminal charges.

I’d like to publicly challenge Keith, to charge us or leave us alone and release the equipment he is holding,” Yoshimura told Hawaii News Now.

I compare him to John Gotti wherein John didn’t like somebody he would go in and shoot up the place and destroy everything in the business and walk away hoping that’s the end of you. In this case, Keith comes in, takes our equipment and claims he’s doing it in conjunction with an ongoing investigation.”

Shortly after a federal judge ruled that the way the machines were being used constituted gambling, Kaneshiro’s office filed the  indictment against Yoshimura and others charging them with gambling promotion, racketeering, possession of gambling devices and money laundering.

I compare him to John Gotti wherein John didn’t like somebody he would go in and shoot up the place and destroy everything in the business and walk away hoping that’s the end of you.” — Plaintiff Tracy Yoshimura

But according to the lawsuit that indictment as well as subsequent attempts to convict Yoshimura and the other defendants were fraught with problems.

According to the lawsuit, Kealoha, through the testimony of Branco, presented knowingly false information to the grand jury to help secure the gambling indictments. Specifically, the lawsuit says they told grand jurors that Yoshimura owned game room and arcades that he, in fact, did not own.

The lawsuit also took issue with the fact that although numerous game rooms and arcades were raided by the police only a handful of the owners and cashiers were prosecuted.

In addition to allegations of selective treatment and retaliatory and malicious prosecution, the lawsuit targets Kaneshiro for negligent hiring, retention and supervision.

Kaneshiro had “a duty to the public to hire competent staff,” the lawsuit says. He failed in that responsibility, the lawsuit says, when he hired Kealoha and Branco.

The lawsuit says Kealoha was “ill-equipped” to handle the gambling case because of her inexperience taking on white collar crime and her lack of research beforehand. It makes a vague reference to “her health issues and other personal issues.”

Yoshimura’s attorney, Keith Kiuchi, said the case has cost Yoshimura and the other defendants hundreds of thousands of dollars over the years. Kiuchi said the fact that only people who challenged Kaneshiro in court after the machines were seized were the only individuals to get prosecuted by his office speaks volumes.

The only businesses that had the nerve to challenge Kaneshiro in federal court are the ones that are being singled out,” Kiuchi said. “Those are the only businesses that were indicted.”

Representatives from the Honolulu Prosecuting Attorney’s Office were also unavailable.

Katherine Kealoha’s criminal defense attorney Cynthia Kagiwada could not be reached.

The lawsuit comes amid a growing U.S. Justice Department investigation into corruption and abuse of power within HPD and the prosecuting attorney’s office.

Yoshimura has been a witness for prosecutors in the case, saying that among other things Katherine Kealoha had provided the name of a confidential informant in the gambling case to his former defense attorney, Myles Breiner, as a way to curry favor.

Kealoha has since been indicted by a federal grand jury along with her husband, the former HPD chief.

Kaneshiro’s office has also been a target of the Justice Department’s corruption probe, which included the FBI executing a search warrant at the prosecutor’s office.

Kaneshiro, who was re-elected to another four-year term in 2016, says he’s testified before the federal grand jury that’s been investigating widespread corruption in Hawaii law enforcement, although he has refused to discuss his involvement.

Other high-ranking officials in his office, including First Deputy Prosecutor Chasid Sapolu, have also been seen at the grand jury, as has one of Kaneshiro’s closet advisors, executive assistant Carol Nakamura.

In 2017, a Civil Beat investigation found that at least one line of inquiry from the grand jury has to do with the purchase of the Honolulu Prosecutor’s Safe House, which is supposed to be a refuge for victims of domestic violence, sex assault and sex trafficking.

According to property records and other documents obtained by Civil Beat, the city purchased the property from one of Kaneshiro’s top campaign donors, real estate investor Donna Walden, for $5.5 million not long after she herself had purchased the property for $4.5 million.

Based on at least one grand jury witness account the deal was already in the works before Walden officially owned the building.

 

Source: CivilBeat.com

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Gambling in the USA

Gaming Americas Weekly Roundup – November 23-29

Niji Narayan

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Reading Time: 3 minutes

Welcome to our weekly roundup of American gambling news again! It was again an eventful week in the USA, despite the still-active virus attack.

Here, we are going through the weekly highlights of the American gambling industry which include the latest news, new partnerships and new acquisitions. Read on and get updated.

Latest News

Caesars Entertainment’s Atlantic City resorts have reached the impressive milestone of distributing one million masks to its employees and customers. During the Harrah’s Resort’s 40th anniversary festivities, Harrah’s longtime customer Angelina Lanza received the one-millionth mask.

The Indiana Gaming Commission is expected to revise its order requiring Caesars Entertainment Inc. to sell the Horseshoe Casino in Hammond by the end of the year. Sara Tait, Executive Director of the Indiana Gaming Commission, said that the commission likely will defer Caesars’ mandatory divestment of the state’s most popular casino for at least one additional year.

The Kansas Lottery has temporarily put a stop to in-person claims due to a rise in Covid-19 cases in the state. Customers who want to claim on a winning ticket will now have to do so by mail. Any prize of over $600 must go through the Lottery’s headquarters. The process requires customers to fill out the back of the lottery ticket, sign it and send it by mail with a printed claims form.

A state agency has launched a one-year study on gambling addiction in Illinois. Results from the report will be used by the Illinois Department of Human Services to help direct future strategies to prevent problem gambling and increase access to treatment and services.

Travis J. Iles, Commissioner of the Texas State Securities Board, has announced a series of enforcement actions against fifteen fraudulent online investment scammers. The enforcement actions highlight a key tactic of fraudulent investment platforms – using the internet and social media to broadly recruit new victims into the schemes.

Partnerships

Golden Matrix Group Inc. has entered into a partnership with Playtech plc. Under terms of their deal, Playtech will have the exclusive rights to distribute GMGI’s newly-developed suite of Esport, peer-to-peer betting games and GMGI’s successful AI player acquisition and retention system throughout Playtech’s extensive global network. Also, Golden Matrix will be granted non-exclusive rights to distribute Playtech’s most popular games through its vast operator network. Playtech gaming software distributed by GMGI will include live dealer games, slots, table games, bingo and poker.

Kindred Group’s Unibet has expanded its comprehensive product offering in Pennsylvania by launching online live dealer tables from Evolution, the leading provider of live casino solutions. Unibet already has a close relation with Evolution in New Jersey and Europe. Unibet will now offer multiple live Blackjack and live Roulette tables in Pennsylvania, with other live games coming later this year.

TransAct Technologies Incorporated has announced that it has been selected by the all-new Circa Resort & Casino in Las Vegas to support the opening of their new gambling floor. Circa has chosen TransAct’s industry-leading Epic 950 and Epic Edge printers for use in all of their 1350 slot machines.

Acquisition

Canadian gaming and esports company GameSquare Esports has signed a Letter of Intent (LOI) to acquire 100% of the issued and outstanding shares in Reciprocity Corp, a privately held gaming and esports company. Under the terms of the LOI, GameSquare Esports will issue 43,750,000 common shares of GameSquare to the shareholders of Reciprocity.

Compliance

Nuvei Technologies Inc., a subsidiary of Nuvei Corporation, has received approval to support the sports betting and iGaming industry in West Virginia. With the approval, the Company will be allowed to operate as an iGaming supplier in compliance with the codes outlined in West Virginia’s Interactive Wagering Act and provide services for sports betting operators under West Virginia’s Sports Wagering Act.

Landcadia Holdings II Inc. has secured regulatory approval from the New Jersey Casino Control Commission to acquire Golden Nugget Online Gaming Inc.

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Gambling in the USA

Gaming Americas Weekly Roundup – November 16-22

Niji Narayan

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Reading Time: 3 minutes

Welcome to our weekly roundup of American gambling news again! It was again an eventful week in the USA, despite the still-active virus attack.

Here, we are going through the weekly highlights of the American gambling industry which include the latest news, new partnerships and new acquisitions. Read on and get updated.

Latest News

Score Media and Gaming Inc. has introduced Bet Section, its new integrated and personalised suite of betting features. According to the firm, the new dedicated home within theScore’s media app takes its innovative cross-platform media and betting experience with theScore Bet to the next level. Bet Section delivers suite of new personalised betting features, further deepening theScore’s industry-leading media and gaming integrations. Personalised betting features include prioritised and tailored markets, live bet tracking and exclusive promotions.

The Cordish Companies has celebrated the opening of Live! Casino Pittsburgh. The eagerly awaited $150 million Live! Casino, located at the Westmoreland Mall in Pennsylvania, is scheduled to open its doors to the general public at 6:00 am on 24 November 2020. The Cordish Companies’ Principal Jon Cordish, Managing Partner Joe Weinberg and Cordish Gaming Group President Rob Norton were joined at the ribbon-cutting ceremony by incoming state Senate Majority Leader Kim Ward and state Representative George Dunbar.

The Argentina government has decided to raise the online gaming tax rate for 2021. Online gambling has barely been regulated in Argentina, but that hasn’t stop authorities from approving a tax increase for the sector. As contemplated in the 2021 Budget, the rate online operators pay will rise from 2% to 5% next year.

Partnerships

Online gaming platform developer LatamWin has entered into a partnership with edict egaming, a subsidiary of Gauselmann Group, which will bring new benefits to Merkur game users in Latin America. One of the main goals of the agreement is to engage online gaming operators and all those new companies of the industry, LatamWin said in a press release.

Scientific Games Corporation has signed a new five-year deal with the Massachusetts State Lottery Commission (MSLC). As per the deal, Scientific Games will supply its world-leading instant games, second chance promotions and digital engagement programmes to the Massachusetts Lottery. Scientific Games’ new contract, which may be extended up to two years by MSLC, includes consumer digital services that will engage players through exciting second chance game features and help the Lottery protect and grow revenues for the Commonwealth.

JCM Global and The Mint Gaming Hall at Kentucky Downs have expanded their partnership again. As per the deal, JCM will upgrade all 450 games in the casino to its award-winning iVIZION bill validator with ICB Intelligent Cash Box system. Also, JCM will install its iVIZION with ICB and GEN5 Thermal Printer in the newly expanded casino area, which houses approximately 600 games and opened in September.

New Appointment

GVC Holdings PLC has appointed Martin Lycka as its Senior Vice President for American Regulatory Affairs and Responsible Gambling. In this role, Lycka will be responsible for expanding GVC’s licensing and regulatory structure in the US and underscoring the company’s commitments to responsible gambling, sports integrity and regulatory compliance. Lycka will also lead regulatory affairs in Canada and support GVC’s Latin America regulatory strategy as the company looks to establish state-regulated offerings in these regions.

New Acquisition

Bally’s Corporation has completed the acquisition of Bally’s Atlantic City Hotel & Casino from Caesars Entertainment Inc. and Vici Properties Inc. The purchase price of the acquisition was $25 million, subject to customary adjustments, and was funded with cash on hand.

Compliance

The Virginia Lottery has received 25 applications for mobile sports betting permits. The names of the companies that applied are not revealed by the Lottery. Big-name companies like DraftKings, FanDuel and Penn National Gaming, affiliated with Barstool Sports, and major casino operators have already shown interest in Virginia’s sports betting industry and may be among the applicants.

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Gambling in the USA

SPORTS DATA COMPANY BETEGY RAISES CAPITAL FROM JKR INVESTMENT GROUP FOR U.S. EXPANSION; RETAINS GLOBAL GAMING EXPERT BILL PASCRELL FOR BOARD POST

Zoltan Tundik

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Photo by Raúl Nájera on Unsplash
Reading Time: 2 minutes

 

BETEGY, a sports data content production service based in Warsaw, Poland, has raised a new round of investment capital from JKR Investment Group, to support its ambitious United States expansion plans.

To help guide its U.S. growth, the company has retained Bill Pascrell, III, Esq., as a supervisory board member.  Pascrell, a globally recognized gaming industry attorney, advisor and strategist, is a partner in Princeton Public Affairs Group, Inc., a public policy consulting and advocacy firm.  

Betegy is an automated content creation system which turns complex sports data into engaging graphics, animations, banners, widgets and texts.  Using machine learning algorithms, the service provides betting operators and media companies with analytics and data visualization by generating high-quality, personalized content. 

Founded in 2012, Betegy clients include ESPN, Tipico, Ringier Axel Springer, Bwin, Yahoo Sports, Sportsbet.io, and Winners.net. With JKR’s financial investment and Pascrell’s management insights, Betegy plans to help U.S media companies, gaming operators and professional sports leagues to gather and display complex data from multiple sources, in fast and easily understood formats. 

The European JKR Investment Group specializes in investments in the tech entertainment industry, helping ambitious start-ups and growing companies to build profitable entertainment businesses using its wide network and in-depth industry expertise.  The Group invests in the igaming, digital marketing, fintech, and esports sectors.

Alexander Gusev, CEO and Managing Partner of JKR, expects the JKR investment “will strengthen our ecosystem and help Betegy to compete successfully in the dynamic and growing market. We are delighted to extend our portfolio with investment into the industry innovator: Betegy is an excellent example of how a service can help clients amplify their specialists’ resources, releasing them from routine production. Operators, sports leagues and online media, their users and wider communities will benefit from Betegy’s leading data technologies and services”

Widely known for his gambling industry expertise and successful advocacy among national and state policymakers, Pascrell represents dozens of clients from around the world including Hard Rock International, Golden Nugget, GVC Holdings, Lottoland, Monmouth Park Race Track, Meadowlands Race Track, PointsBet, PokerStars, Amaya, A Game Above, Hexigames, GiG, and BetMakers.  

Pascrell’s work has been pivotal for several major gaming industry milestones including the successful legalization and regulation of U.S. sports betting through a 10-year campaign to repeal the Professional and Amateur Sports Protection Act (PASPA), culminating in the U.S. Supreme Court’s 2018 landmark ruling.  He also led the successful campaign to bring legalized and regulated online gaming to the U.S. in 2013.     

Pascrell said, “Joining Betegy as a new Supervisory Board member provides a great opportunity and responsibility toward a growing U.S client base. Led by Alex Kornilov, CEO & Founder, Betegy has combined cutting-edge technology with a powerhouse management team for a truly global reach.  Betegy is a strong and dynamic company that has the tools and leadership to penetrate the U.S. market and to provide unique data content to its growing U.S. clientele.”       

Kornilov explained, “This is a new chapter for Betegy clients as together we change the approach to data-driven content production globally. Our partnership with JKR Investment Group is more than a financial backing of our vision.  We gain in-depth industry expertise and access to a wide network, which will accelerate our growth.  

“At the same time,” he added, “Bill Pascrell’s long experience in U.S. and global markets will be invaluable as he helps us to navigate new markets. His experience is vital for Betegy’s success in the U.S.” 

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