“My Father was a gambling man,
down in New Orleans.”
-The Animals

My father was a gambling man in Northern Kentucky. Bookmaking was one of one dad’s primary activities. Dad understood that what he was doing was against the law.

Dad left bookmaking at a young age   to quit  living in fear.  He always kept his bookmaking records in the kitchen stove and would turn on the oven  and destroy them if anyone came near the  house.

Tom Emberton knocked on my dad’s door during his race for Kentucky’s Governor  1971.   Flames shot out of the oven as Emberton pandered for dad’s vote.

He did not get it. The knock cost dad some serious money.

Bookmaking is still illegal in every state expect Nevada.  I’m not sure why.  There are so many ways to bet online that the law enforcement officials have given up trying to enforce the laws against it.

But it is still illegal.   I’ve always understood the word “illegal” to mean “against the law”.

The word “illegal” must have a different meaning to the people at the Fidelity Investment company. 

I have not been happy with   Fidelity for a long time.  They sold “contractual” mutual funds to soldiers  and I think they are still doing it.   Those plans are big money makers  for Fidelity but a horrible deal for the military families  who bought them.  
  
I hate what  Fidelity  did to the  soldiers  but it wasn’t illegal.   It was immoral, disgusting and wrong but not against the law.

Bookmaking is against the law.

Fidelity has not gone into taking bets themselves.  They found a more sophisticated way to be  bookies.  They   invest in offshore companies that take bets from people living  in the United States.

The New York Times said that investment houses like Fidelity,  Merrill Lynch and Goldman Sachs hold hundreds of millions of dollars in  stocks of online casinos.

Fidelity Management has $363 million of shares in a company called SportingBet.  Fidelity owns over 14% of that  company.

If you check out SportingBet’s website, it calls itself, “The World’s Leading Online Gaming Company” and has a subsidiary called “SportingBetUSA” that says it is  “where America bets.”

Plenty of Americans are betting illegally with “SportingBetUSA”.  SportingBetUSA is  breaking  the law and Fidelity is giving them money to do it.

The site says that SportingBetUSA will not disclose details to  tax authorities.

If you hit the lottery, you are going to pay taxes on it.  They will even withhold part of your winnings.  If you bet   with the illegal bookies funded by Fidelity, you might be able to evade the tax man.  

SportingBetUSA  also  has a “play for fun” section that is aimed at children under 18.  A good place for school kids to learn how to shoot craps.

Dad couldn’t advertise, take credit cards or get big Wall Street companies to back him.  He had to turn away  big bettors as he did not have the bankroll to pay off if they won.

Imagine if he had  Fidelity at his side.

The United States is losing out on millions of dollars in bookmaking revenues it can tax.  Americans and now American investment companies  are funneling money into these illegal operations and no one is doing anything to stop them.

 The most obvious solution is to allow bookmaking all over the United States.    Technology has made it too easy for online and offline bookies to evade the law.   In an era where casinos, race tracks, slot machines and lotteries are everywhere, there is no real argument against making sports betting illegal.

On the other hand,  since bookmaking is illegal, someone needs to enforce the law.  Not against small time bookies.  Someone needs to shut down the offshore operations and go after Fidelity and the companies funding them.  

If companies like Fidelity find they can make money by promoting illegal activities, where do they go next?  I’m sure if drug dealers or gun runners could figure out how to sell stock in their businesses, companies like Fidelity might invest in them.

We need to let these big companies know that they are not above the laws that the rest of us live by.

It is time to take Wall Street companies out of the bookmaking business.

Don McNay is President of McNay Settlement Group where we promote investing, not gambling.   His column is syndicated on the CNHI News Service.     You can write to him at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it or read other things he has written at DonMcNay.com