Sports betting magnate James Giordano goes to jail

Last Wednesday, a former bookmaker named James Giordano pleaded guilty to promoting gambling in New York. The 55-year-old Pinecrest resident was indicted in 2006 for running a sports betting website in the Caribbean that took millions of dollars in bets from dozens of U.S.-based bookies and gamblers.

It was all part of an epic battle over the legality of Internet gambling. That struggle has seen the United States on the losing end of an international trade war with tiny countries such as Antigua and Costa Rica and vast trade markets such as the European Union.

The government allows betting on horses, dogs, slots, and poker across South Florida, but it has been nailing offshore gambling mavens such as Giordano. The crackdown has come even though the Nevada Legislature in 2007 legalized Internet gambling within its borders.

What do you suppose Al Goldstein thinks about the federal Internet gambling ban?
Doug Meszler / WENN/Newscom
What do you suppose Al Goldstein thinks about the federal Internet gambling ban?

"It's hypocritical," Giordano tells New Times. "If you want to bet the [New York] Giants, you have to fly to Vegas."

Giordano — who spoke at length for the first time about his life — began his gambling career at a New York-area grocery store, where he watched a produce manager take bets from employees and then hand off the cash to a small Italian fellow. He remembers taking the produce manager aside. "I told him: 'You gather bets... it seems to me if you eliminate the phone call, you can keep the money.'"

Soon he began his own little bookmaking operation, first with the produce manager and later on his own. Then he worked for 11 years with a partner. "It just became a business," he says. "We never looked at it as being something terrible... We kept it clean."

He was nevertheless arrested for promoting gambling in Suffolk County in 1991. He avoided jail time but paid a fine and started up again. By the mid-'90s, he had about 600 customers during football season. He rented an unmarked space in an office building and used a phone system that rolled calls over so no one got a busy signal. "I always had an affinity for numbers," Giordano says. "If you're going from here to there, I'll be able to tell you how many red cars you'll see. I'll give you odds that you might actually be willing to bet on."

In 1996, he got popped again and paid a fine. It was then he had the idea to launch an offshore Internet company.

At the time, there were very few online gambling sites and only a handful that had been started by Americans. A lawyer told him the act of taking bets across national boundaries might be illegal but there was a huge gray area, so Giordano moved himself and his wife, Priscilla, to the Caribbean island of St. Maarten, which had legalized sports betting. He found a partner, obtained a license through the government of the Netherlands Antilles, and in November 1997 opened a sports betting business.

The initial site was a "cash post-up business." Gamblers would deposit an amount of money and bet against that cash reserve. It was tough to sign up bettors, so by 2000, the site had evolved into PlayWithAl.com.

Who was Al? Why, none other than Pompano Beach firebrand, pornographer, and Screw magazine publisher Al Goldstein, who wanted to add an Internet gambling button to his website. "Goldstein was a genius, so beyond eccentric that I don't know what the next word would be," Giordano says.

About two dozen bookies who used his service included a former pro baseball scout and a former maitre d' with supposed connections to the Genovese crime family. Giordano employed Priscilla and their daughter, Melissa.

Eventually, Giordano says, he was making $12,000 to $40,000 a week, serving somewhere between 600 and 2,000 gamblers in each seven-day period. At one point, he had to fend off a group of Russian computer hackers that made a practice of breaking into servers and holding them for ransom.

In 2003, Giordano and his wife moved to a million-dollar Pinecrest home surrounded by a cream-colored wall, a green patinaed gate, and 12-foot columns. The couple opened a small office nearby and hired college students to act as customer service and marketing representatives. The computer servers remained in St. Maarten.

Back in New York, though, authorities began an investigation in 2004, when an undercover detective working another case overheard a man who reputedly had ties to the Lucchese crime family discussing payment of a gambling debt related to Giordano's website.

Soon, authorities obtained a search warrant and hacked into computer servers in St. Maarten and Costa Rica, where he'd expanded. They mirrored the transactions of dozens of bettors. In March 2005, local police showed up at Giordano's office after receiving a report that one of the employees had sexually assaulted a woman. They noticed brochures and other documents that suggested they had come across a gambling operation, and called the FBI.

Agents arrived the next day with a search warrant and seized the computers and paper records.

But there was no bust, at least not immediately. All wagering had been done online and offshore. "We instructed [our employees] never to take a bet," Giordano says. "They didn't even know how to take a bet. It was strictly customer service."

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