Offshore Gambling 'Pioneer' Details Fall
(MIAMI) — He learned at the knee of his bookmaker father in New York, took street bets in his teens, and partied with Las Vegas high-rollers. He made millions of dollars as a self-proclaimed offshore sports gambling "pioneer," flirted with Internet gambling, and was pinched by the FBI.
That's the story of Steve Budin, who saw his life come crashing down when he was arrested in 1998 in the first-ever U.S. prosecution of Internet sports betting.
His life is detailed in his book, Bets, Drugs and Rock & Roll. Released in early October, the book has been ranked among the most popular sports books on Amazon.com. It shows the birth of offshore sports gambling, which by the early 1990s left behind the street bookies for a system where bettors could pick games from their home, making calls to a sports book in Central America with credit card in hand.
"Even though we were offshore sports book pirates and pioneers, we lived like rock stars. We were wrapped up in the middle of an MC Hammer video in the 80s," the quick-tongued Budin said from his downtown Miami office.
"We had the big houses and big pools and the tons of people and the parties. But don't get me wrong. We work very, very hard, 16 hours a day."
Gambling on sports became a much-discussed issue this year when NBA referee Tim Donaghy pleaded guilty to felony charges for taking cash payoffs from gamblers and betting on games he officiated. Sports gambling is essentially illegal in every state but Nevada, where sports books in Las Vegas casinos attract gamblers from around the world.
In addition, there are many sports books located in foreign countries that provide credit card processing and allow people to make bets over the Internet.
Budin went to high school in Miami, where he began building an affluent client list, plying an illegal sports gambling trade by tapping his New York financial connections and using charm and street smarts.
"You don't go to college and major in being a bookie," Budin said. "The people that you're going to deal with are the type of people that work on the street, and those aren't nice people."
By the time he was in his 20s, Budin decided to enter the legitimate gambling world, so he began conducting gambling junkets for high-rollers in Las Vegas, where the vices mentioned in the title of his book proliferate.
One of his clients told Budin he had a license to begin sports betting in Panama for residents of that country, an effort that failed miserably. But Budin's vision led him to the idea of offering telephone bets for U.S.-based gamblers in a friendly foreign country where laws and politicians permitted such activity.
He secured some money from investors he calls his silent partners and refers to only by aliases "Bo" and "Donnie." He moved his operations to Costa Rica and SDB Global began fielding telephone sports bets from U.S.-based bettors.
"Part of the reason why we made the whole offshore movement was to transition the business and take it from a shady street business and make it the Wal-Mart of sports betting and bring it to the masses in a way that they had never been given it before," Budin said.
The enterprise took off, making Budin a multimillionaire. By 1998, several years into his offshore gambling business, SBD Global was clearing a profit of $10 million a year.
As Internet technology improved, Budin started preparing to take bets in cyberspace rather than the phone, a move he expected to generate hundreds of millions of dollars. He had a goal of taking sports gambling to the World Wide Web in March 1998.
That's when the U.S. government stepped in before he could ever take one Internet bet. Budin and more than a dozen others, including his father, were charged with conspiracy for allowing thousands of people to bet on professional and college sports events, breaking a 1961 law making it a crime to use interstate telephone lines for gambling, and advertising their services on the Internet.
Then-Attorney General Janet Reno said at the time that the Internet was "not an electronic sanctuary for illegal betting."
Father David Budin pleaded guilty while Steve Budin's prosecution was deferred in lieu of $2.5 million in fines, the son said. Some defendants fought the charges, while others remain fugitives.
Steve Budin was forced to start over, and today he has a successful Web site where he sells sports gambling tips for $20 a pop.
One industry observer, Russ Hawkins, says Budin's claims of being a pioneer are just bragger's words. Hawkins, chief executive of majorwager.com, a sports gambling information Web site, said other offshore sports books existed before Budin's and he did nothing new.
"He's a lot of talk," Hawkins said. "He's trying to make money on a book. He's all bravado."
Brandon Lang disagrees. Lang — whose ability to pick football games was portrayed in the film Two for the Money, with Matthew McConaughey playing Lang's character — is a friend of Budin's and wrote the foreword to the book.
"There is jealousy that runs rampant in this business," Lang said. "They mix up his confidence with conceit. He's one of the sharpest people I have ever met."
Budin laughs when he calls himself brilliant or a genius, but one can tell he's only half-joking.
He said he learned from his past and says his wife and three children — not illegal bets or drugs or rock and roll — are his No. 1 priority.
"I've lived on the edge my whole life and that's something that obviously appealed to me. Maybe the book was a little bit of therapy," he said. "I have to be close to the edge, or else it's not fun for me. I'm just not standing over it anymore. I've moved two steps back from the edge. I think that's a big growth."