Federal prosecutors said Friday that 11 people across Alabama have been charged with tax evasion, illegal operation, and money laundering activities in connection to an online sports betting organization.

Illegal sports betting operations:

According to AP, prosecutors said that the defendants operated the Red44 sports betting organization. The defendants confirmed that the online organization was run by an offshore server located in Costa Rica and that it was involved in sports betting activities, which are illegal in the state. Prosecutors have filed an indictment in Birmingham with as many as 114 counts including charges of tax evasion, an illicit association in running an illegal sports-betting organization, and money laundering.

Failure to pay $20 million in taxes:

The indictment contains allegations that the organization used the online facility to receive hundreds of millions of dollars in bets from gamblers but that the wagering operators failed to pay excise taxes to deprive the state of millions of dollars. Prosecutors estimated that the illegal organization made $75 million in revenue between 2019 and 2021 and failed to pay almost $20 million of due taxes.

The investigation has shown, according to prosecutors, that the organization has its origin in Alabama and that the Red44 operation’s latest form has been derived from a single sports-betting operation in the state. They also pointed out that the state law treated gambling operations as illegal. Alabama gambling laws are fairly restrictive, limiting betting to greyhound dog racing and horse racing, as well as online wagering operations which Red44 failed to comply with.

Restrictive gambling laws:

The case was investigated by the IRS and Homeland Security. The officials informed the public that the 11 defendants were senior agents in the Red44 organization, as well as the original founding members who illegally operated the online wagering facility. AP reports that six of the 11 defendants are from Alabama, with others living in other US states. Prosecutors said that Red44 had a way of operation similar to a multilevel marketing business as it paid bookmakers a percentage of their subagents’ profit for providing users to the online platform.

Offenders facing 114-count indictment:

Sports betting in Alabama is not currently legal despite multiple efforts to legalize it in the past. The state has no commercial casinos, there are only three tribal casinos operated by the Native Americans. Alabama is also one of just five states in the US without a lottery. Therefore the offenders associated with Red44 operations are now facing charges under the 114-count indictment for causing pecuniary and other damages to the state of Alabama.