Costa Rica-based offshore sportsbook operator 5Dimes is, as was widely predicted, exploring options for making a legitimate bid to enter the regulated US sports betting and gaming sector.
Having ceased taking bets from US customers last month, the firm has entered into a settlement agreement with the US Attorney for the Eastern District of Pennsylvania, securing eligibility to apply to enter the business on a legitimate footing.
It will do so under a new corporate structure, free and clear of any restrictions on the use or transfer of its assets and in full compliance with US law. A new corporate entity, 5D Americas LLC has already been incorporated in the State of Delaware.
5Dimes formerly operated for many years under the full and exclusive control of its founder, William Sean “Tony” Creighton. Prior to his kidnapping and murder in 2018, both 5Dimes and Creighton were under federal investigation by the US Department of Justice, specifically the EDPA. After Creighton’s death, his widow Laura Varela assumed responsibility for 5Dimes’ assets, although she did not exercise day-to-day authority over the operations.
In the spring of 2019, Varela voluntarily contacted the EDPA to resolve any prior criminal activity by 5Dimes. This settlement agreement is a direct result of her cooperation with the EDPA to resolve the criminal investigation and clear the company.
As part of the settlement, Varela identified criminal assets associated with the company and agreed to forfeit more than $46m in value to the government. The cooperation did not include disclosing information or identities of any customers.
As noted in the settlement agreement, the government’s lengthy investigation confirmed that Varela was not involved in any illegal actions of 5Dimes. The agreement expressly clarifies there are no legal restrictions on her use of her assets or the assets of the 5Dimes brand to explore future options, including, but not limited to, re-constituting the 5Dimes brand to be licensed to conduct legal, regulated gaming activities in the US and internationally.
“It has been a very difficult two years for me and my family,” said Varela. “But today marks a pivotal turning point and a fresh start for me and the 5Dimes brand, as well as a milestone for the legalization of sports gaming in the US. My husband’s death was tragic, but he loved 5Dimes and all of its loyal customers. Now his spirit will be able to live on as the 5Dimes brand begins this new chapter.”
She added: “Along with a team of trusted advisors, I am exploring how we might relaunch 5Dimes as a legal sportsbook and casino in the legal, regulated US market to continue serving our many loyal customers.”
The agreement required 5Dimes to stop servicing US customers by September 30, 2020. To satisfy that demand, 5Dimes stopped taking bets from US customers as of September 21, 2020, until it is reconstituted as a new, legal and licensed entity in the US. The firm notified its players to suspend their accounts and transfer their balances by September 25, 2020.
Any customers who did not request a withdrawal of their funds by September 25, 2020 will have those funds transferred to Epiq, a third-party claims administrator, who will seek to deliver the funds to the account holder. In compliance with the agreement, any customer funds that are not claimed by September 30, 2021, will be forfeited to the US government.
