In the “very predatory” world of illegal gambling that attracted the interpreter of Shohei Ohtani

In the story, Shohei Ohtani’s interpreter, Ippei Mizuhara initially told ESPN, the two men jointly accessed Ohtani’s bank account on eight or nine occasions in 2023 and wired increases of $500,000 to Mathew Bowyer, an alleged illegal bookmaker under federal investigation. In the story Ohtani told the public days after Mizuhara recanted his initial claims and was fired by the Dodgers, the interpreter had stolen money to pay off his gambling debts.

Both versions of the story generated a question that baffled the general public: Why would a bookie extend a line of credit of at least $4.5 million to someone who said he was earning an $85,000 salary as a performer with the Los Angeles Angels? The scenario was easier to understand for those familiar with the inner workings of gambling markets.

“Credit is the lifeblood of illegal bookmakers,” said Chris Grove, a gambling entrepreneur and investor. “So we shouldn’t be surprised if an illegal bookmaker uses credit to attract a high-value customer, especially when that customer has demonstrated a willingness to do so.”

The scandal has captivated the baseball industry and the sports world at a time when gambling has become intertwined with sports consumption. Ohtani, the 29-year-old two-time American League MVP who recently signed a 10-year, $700 million contract, said he has never bet on baseball or any other sport and has not been accused of any wrongdoing. He described himself as a victim deceived by a friend. “Ippei stole money from my account and told lies,” he said through his new interpreter, Will Ireton. Major League Baseball has opened an investigation. The IRS field office in Los Angeles worked with the Department of Homeland Security to investigate Mizuhara and Bowyer.

The story also opened the public a portal into the less understood world of illegal bookmaking. Since the Supreme Court struck down a 1992 federal law that effectively legally banned sports betting in most states, most of the country has gained access to betting on games. Yet, a 2022 report from the American Gaming Association estimates that Americans wagered a total of $63.8 billion with illegal bookies and offshore regulated sites in 2021. So why do these bookies and offshore operations maintain such a thriving business?

The allure of credit – the ability to gamble money you don’t actually have – is the main reason, as emerged from interviews with lawyers, entrepreneurs, researchers and professional gamblers. These experts made most of their comments about the broader world of illegal gambling, rather than the Ohtani and Mizuhara saga. But they also highlighted a number of additional factors that drive bettors to bookmakers, including the promise of privacy, the ability to avoid taxes on winnings, the removal of artificial betting limits and the enduring appeal of convenience.

“Ohtani’s situation reminds us that there is still a thriving illegal market, because there are still people in the illegal market willing to offer consumers things that the regulated market can’t or won’t,” Grove said.

The prosecution team tracking Bowyer is the same one that investigated another gambling ring run by former minor league baseball player Wayne Nix. The Los Angeles Times reported it. One of dozens of people charged in that investigation is former Dodgers outfielder Yasiel Puig, who has pleaded not guilty. The Nix investigation demonstrated the modernity of the practice. The concept of meeting a bookie in a dark alley or a seedy saloon is outdated. Nix used a network of bookmakers who took bets through a website and telephone line, according to the Washington Post.

Convenience adds to the appeal, especially when placing an illegal bet only requires clicking a few buttons instead of walking into a Las Vegas casino, a professional gambler said. “The last thing a guy wants to do is go to Circa Sportsbook every day and put $20,000 on (games),” Ingram said. “Some people just text a person or go to the website.”

Bookmakers often maintain a personal relationship with their customers, forgiving certain bets, offering free gambling credits or pitying “bad beats”, the unfortunate outcomes that bind all gamblers. “They offer customer service that sometimes can’t be offered through an app,” said Timothy Fong, co-director of UCLA’s gambling studies program.

Fong, a psychiatrist, studies the causes and treatment options for gambling addicts. Some of those who bet through illegal bookmakers want anonymity. Others don’t want to pay taxes on a potential jackpot.

Daniel Wallach, a Florida sports betting and gambling attorney who has previously written for Atletico, suggested that a sense of loyalty can keep bettors entwined with bookmakers. “These patterns may be difficult to break, given all the incentives,” Wallach said. “There could be better lines, better odds” for a regular player.

Bookmakers also offer bets that legal betting companies can’t or won’t, depending on state laws or exposure risks. Some states, for example, ban betting on local college teams, and against the backdrop of the March Madness college basketball tournaments, the NCAA is seeking to further limit college betting; last week, NCAA President Charlie Baker urged states to ban betting on college athletes entirely. Bookmakers exist in a world indifferent to these developments, which can be attractive to bettors looking for specific types of action that legal books may not offer.

“Instead of the 30 types of cereal they offer,” Fong said, “I can get 100 different types of cereal that my bookie offers.”

Spectators watch March Madness NCAA Tournament games at Borgata Casino sportsbooks in New Jersey this March. (Wayne Parry/Associated Press)

In the case of Mizuhara and Ohtani, location matters. California is one of 12 states where sports betting is legal. In 2022, voters rejected a pair of competing ballot initiatives to keep it that way, demonstrating how difficult it will be to legalize betting amid a costly and often bitter fight between tribal casinos and private betting companies. Proposition 26 would have legalized in-person gambling at tribal casinos and racetracks. Proposition 27 would have allowed online sports betting.

When voters rejected those initiatives, Mizuhara was already facing more than $1 million in gambling debts, he told ESPN. Mizuhara said he met Bowyer at a poker game in San Diego in 2021. To boost his business, Bowyer told associates that Ohtani was his client, the Los Angeles Times reported. Diane Bass, Bowyer’s attorney, said her client had no contact with Ohtani.

In many cases, a player must be referred to a bookmaker by an existing customer, and the existing customer sometimes receives a referral bonus when the new player bets. If the new player does not pay the bookmaker when necessary, the referral will be stopped; Peer pressure often serves as the first resort to get gamblers to continue paying their gambling debts.

Bookmakers also offer incentives for customers to pay in the form of free play or other forms of free betting; the bettor is incentivized to pay and use free bets to continue chasing his losses and return to profit. In cases where bettors are deeply in debt, bookmakers accept partial payments or offer customers weekly or monthly payment plans. Payments are often made on cash transfer apps like Venmo or PayPal, although sometimes cash is mailed, depending on the size of the transaction.

Mizuhara told ESPN that Bowyer extended him a line of credit that allowed his losses to stretch into the millions, which experts described as customary for a bookmaker who felt confident in the bettor’s ability to pay.

Bookmakers can make a living, especially if they can attract a few high-value, deep-pocketed customers, assuming they can stay out of the authorities’ sights. Punters themselves rarely, if ever, face legal consequences for betting with illegal bookmakers; the government generally sought to prosecute operators, not customers, when it prosecuted illegal bookmaking. At the same time, however, the lack of government oversight can also backfire on bettors who win big. If the bookmaker decides not to pay out a significant win, players are left with few options.

Some of the largest unregulated gambling operations are entirely outside the jurisdiction of U.S. state regulators because they are based in foreign countries. These so-called “offshore” sites often style themselves to look like regulated American sports betting sites and have domain names like “.lv” to suggest they are based in Las Vegas (in this example, lv stands for Latvia). These typically don’t offer the personal experience that illegal US-based bookmakers offer, they generally don’t offer credit, and transferring cash in and out can be difficult; some gamblers use cryptocurrency to transact with these books. A small subset of bettors have placed bets on sites like these without knowing they were illegal, having stumbled upon one of the many unregulated sites offering the appearance of ownership.

“Look at it: It’s clean, it’s fresh, it looks like a regulated thing,” Fong said. “It feels no different than a cheap version of DraftKings or FanDuel. “It’s all bets on that.” The unwitting consumer, Fong explained, “has no idea that what he is actually participating in is an unregulated and unprotected gambling activity.”

If they do well enough – and can be sure of getting paid – betting with an illegal operation can also be profitable for the bettor; In addition to taxing players’ winnings, regulated websites also sometimes restrict the actions of players perceived as winners, experts say. The bookmaker can offer more freedom, certainly from taxes but also from limits. “In the illegal market, you probably won’t find any constraints or restrictions on the amount you can bet,” Wallach said.

The evidence suggests that Mizuhara was far from a winning bettor. Mizuhara portrayed himself as a drug addict unable to regain his losses. In these cases, using credit also helps the bookmaker.

“What they do is they let these people end up with money they don’t have,” the professional gambler said. “He IS very predatory. It’s sad, really, because that’s how much of the gambling world works.

(Top photo of Mizuhara and Ohtani at a Los Angeles Rams game in December: Sean M. Haffey/Getty Images)