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A lawsuit filed in Florida alleges that a former employee of Oakes Farms and Seed to Table is stuck with a massive bill from the IRS for winnings that he claims are not his.
Andrew Moste says he felt pressured by the company’s vice president, Steven Veneziano, to let the latter use his DraftKings daily fantasy sports account. Veneziano came out $216,000 ahead and owes $93,000 in taxes on those winnings. However, since it’s Moste’s account, that’s where the tax bill went.
The suit alleges that Veneziano refused to hand over the cash and instead attempted to convince Moste to participate in tax fraud with him. Moste is seeking a jury trial and asking for over $181,000 in damages.
This is the second time in as many months that DraftKings has been at the center of legal drama over alleged account sharing. The previous story likewise involved a bettor from Florida, who placed a staggering $3 million wager through a friend’s New Jersey sports betting account.
Legal online gambling is very new in the US. It’s likely the case that many users aren’t yet familiar with some legal details and their own responsibilities. Let us therefore be very clear about this:
Under no circumstances should you let anyone else use your online gambling account.
This is true whether we’re talking about US online casinos, poker rooms, sportsbooks, DFS sites, or anything else. It also applies whether you’re actually letting another individual log into your account or just taking their money and instructions and placing bets on their behalf. It’s illegal, for good reason, and it’s likely to cost you money one way or another.
Since an employer-employee power dynamic was at play, Moste has included Oakes Farms and its owner Alfie Oakes in the suit.
Oakes is no stranger to controversy. He’s made headlines in the past for vocally opposing progressive social movements like Black Lives Matter. More recently, he has called COVID-19 a hoax and challenged Collier County’s mask mandate in federal court while openly violating it at his businesses.
Lawyer Steven Bracci, who represents all three defendants, describes Moste as a “disgruntled former independent contractor” and says his claims have no merit. Despite acknowledging that Veneziano played from the account with Moste’s name on it, he claims this is a legitimate arrangement that Moste consented to.
Veneziano is a sometime poker player and sports bettor who apparently had his own DraftKings account banned. It’s unclear at this time whether this was for previous terms of service violations or some other reason.
The events described in the suit began in 2008, well before the DFS boom made DraftKings a household name. Moste claims he asked Veneziano to stop using his account. However, the latter merely linked the Oakes Farms business bank account to Moste’s DraftKings account so he could continue using it without Moste seeing any financial transactions show up.
Moste claims that when he received the tax bill and asked Veneziano to pay it, the latter refused. Allegedly, Veneziano first gave him a box of losing lottery tickets and told him to claim them as his own so he could write off those losses against the DFS winnings. Moste wasn’t comfortable doing that, so Veneziano told him not to declare the winnings at all.
The rest of what transpired in the 12 years since the saga began will presumably come out in the courtroom.
The situation from November is a little different. There, it relates to what’s known as messenger betting.
While DFS is legal in Florida, sports betting is currently not. An unnamed but evidently well-heeled Florida bettor had therefore taken to placing his bets through a friend in New Jersey.
Messenger betting has a long history, dating back to when sportsbooks could operate legally only in Nevada. It’s always been illegal, and in fact, a major purpose of the federal Wire Act was to make it illegal to use the phone to facilitate this. Even so, it was mostly overlooked in those days. It was neither a big problem nor easy to enforce, as in-person cash transactions are mostly untraceable. There are even loopholes for doing something similar in a legal fashion, such as “entity betting.”
Now, mobile sportsbooks are under much more legal pressure to prevent messenger betting. State laws require that a bettor be physically within their borders to place a bet. Betting by proxy to circumvent these geolocation policies is something sites take quite seriously.
Even so, this bettor alleges that DraftKings’ sportsbook director Johnny Avello gave him verbal permission to bet through his New Jersey proxy. DraftKings denies this, of course.
The bettor then placed two identical three-leg NFL futures parlays through his proxy, for a total of $3 million. DraftKings spotted the suspicious activity and froze the account, seizing those bets in the process.
Thus, we see that account sharing or proxy betting is a twofold risk. First, there is the likelihood of falling victim to fraud by the third party using the account or betting by proxy. Second, it’s a violation of the terms of service and of betting law. It can lead to a ban and seizure of whatever funds are in the account.
On the surface, it doesn’t seem like that big a deal to share an account. After all, it doesn’t cost anything to open an account, and a dollar is still a dollar whoever it comes from. In most cases, it feels like someone betting from another’s account could just as easily have played from their own.
That’s exactly the problem, however. If someone is legally allowed to bet, then it’s easy to do it from their own account. There’s no legitimate reason to share accounts.
Thus, anyone asking to play on another’s account is almost certainly either forbidden from betting or doesn’t want the money traced back to them. There are a few possible reasons for this, some of which apply to these cases:
These issues, particularly the money laundering possibility, are taken very seriously by the authorities. This is exactly why sites are so diligent when it comes to Know Your Customer (KYC) policies, which demand careful identity verification.
In both these cases, it seems the account holders and bettors knew that they were doing something they weren’t supposed to. They may have underestimated the odds of getting caught or the severity of the consequences. However, it’s likely that many smaller instances of account sharing are happening around the country due to ignorance of the rules.
In that sense, these two cases serve as useful cautionary tales. It’s important that everyone understand the rules and why they exist. Only one user is allowed per account, and violating that policy is a recipe for trouble.