Last Friday, Bubba Technology Group, LLC, a South Carolina-based company, received a sentence of one year of probation. It had pleaded guilty to operating an illegal gambling organization.
Bubba and its co-conspirators will fork over more than $1 million due to the conviction. The charges, filed in July 2021, came out of a lengthy investigation by Homeland Security Investigations and the South Carolina Law Enforcement Division.
US Attorney Adair F. Boroughs stated:
The Defendant took a chance that it could make money by breaking the law. It lost that bet. Wherever illegal money is made, crime festers.
This business sold machines that allowed people to make wagers and win money – which makes the business illegal under federal law here in South Carolina. This office will aggressively pursue those who seek to get rich by breaking federal laws.
According to officials, the evidence presented in court proved that Bubba was leasing and selling unlicensed gambling devices. These are known colloquially as “fish machines” in the state due to the nature of their gameplay.
Before being shut down, these machines were most commonly found at bars and convenience stores throughout the state. These businesses would split the profits from the devices with Bubba.
Real-Money Arcade Gaming: Gambling or Game of Skill?
Bubba and the businesses hosting its fish machines have argued that they are not gambling because the game contains an element of skill. Other jurisdictions are likewise wrestling with the regulatory dilemma of such “skill machines.”
Virginia, Michigan, Pennsylvania, Kentucky and many other states have heard countless variations of the same argument from operators of unregulated gaming machines. Neighboring North Carolina is in the midst of a crackdown of its own.
According to officials, fish machines accept money from players who then attempt to “shoot” digital fish in an arcade-style game, earning credits based on their performance and initial wager. After the game, the machine would print out a paper ticket which the players could exchange for cash with the business owner.
However, in South Carolina, the law defines a “gambling machine” as any device providing cash payouts to players based on the outcome of a game. It is illegal in South Carolina to keep, operate, or distribute unlicensed gambling machines within state lines.
The Magnitude of the Problem
According to a recent study by the American Gaming Association (AGA), these unregulated gambling devices – or “gray machines” – account for 61% of the illegal gambling in the United States. The AGA estimates that these machines take in $26.9 billion annually. The trade organization, which represents regulated gambling operators in the US, says that states may be losing $8.7 billion in annual tax revenue due to the presence of gray machines.
South Carolina Attorney General Alan Wilson told the media:
No matter what your personal views may be, gambling is against the law in South Carolina. The law is the law and it must be followed.
As a result of the felony conviction, Bubba must hand over $367,039 in profits from the ill-fated venture. Naturally, it will no longer be able to sell or rent such devices in the state. Retail businesses that had participated in the scheme saw dozens of gaming machines seized by authorities and were forced to pay a total of $673,408.
HSI special agent Ronnie Martinez said:
Cases like this prove the old saying, that ‘crime doesn’t pay,’ is right. Thanks to the great work done by HSI and its law enforcement partners, this illegal gambling enterprise has been dismantled.
South Carolina Law Enforcement Division (SLED) Chief Mark Keel said:
Illegal gambling operations like this will be shut down. SLED Agents worked closely with our federal partners on this operation to ensure any business that violates the law will be held accountable.