About to get really, really off-topic, but this illustrated the convoluted, tangled web of private, state (and Tribe) interests that that somehow all connect to online gambling.
From the
NYT:
The Times also traced Internet traffic to the popular offshore site Bovada.
At the request of The Times, Doug Madory, director of Internet analysis for Dyn, an Internet performance company, analyzed the routes by which computers in the United States gained access to Bovada. Mr. Madory concluded that United States Internet traffic is funneled through a private network to the data center on the Mohawk reservation.
The private network, which provides direct links to havens of gambling infrastructure like Malta, Gibraltar and the Isle of Man, is called Continent 8 Technologies and was co-founded by J. Michael Tobin, a former director of Empire State Development, the lead economic development agency for New York State, records show. The Mohawk data center is managed by Continent 8.
I've previously done some research on "Empire State Development" and one of their public-private partnerships. They were involved in a project with Goldman Sachs and New York State (
http://www.liifund.org/products/community-capital/capital-for-healthy-food/new-york-healthy-food-healthy-communities-fund). They received some state grants (e.g., free money) and some funds loaned from Goldman that were in turned loaned to grocery stores in under-served areas (you may have heard of "urban deserts" where the only readily available food is junk food and fast food, with little access to fresh vegetables and healthier options). Sounds great, right?
The problem is that Goldman and this newly created public private entity loaned the money out to small mom and pop style grocery stores in very large amounts. Like a $1m+ to renovate your grocery store in Mt Vernon, NY (a poor area north of the Bronx). The idea being, after you expand your grocery store, you can have more space to sell veggies. Or, more people would come because the store is nicer. No funds were allowed to purchase inventory of food, but were allowed only to renovate and expand existing stores or build new stores. This being Goldman Sachs, they wanted a nice return on their investment, so the rates are not exactly charity (understandable given the risk that the funds are being loaned to grocery stores in poor areas and that groceries are very low margins for profits). The loans were also secured by personal guarantees from mom and pop owning the store.
If the grocery store were to default and not be able to pay back their jumbo, sub-prime, high-interest loan (something like 6% in a very low interest rate market), the lender would be able to foreclose on the store and collect any deficiency from the owner who provided the personal guarantee. So, now you've potentially got a poor urban area with just a few junk food bodegas and fast food stores, and the one grocery store in the area is shut down because they borrowed too much money.
Oh, and that portion of the loan that is a "grant" courtesy of NYS -- that's fully taxable as income. So you get a $1m loan with a $100k grant, you've got a tax bill of $30k on the income from the grant in addition to the substantial interest payments on the $1m. And when the term of the loan is up, you've got a huge chunk of principal to pay back (does not fully amortize). Or, you can refinance it into the future, and extend the revenue stream to Goldman for additional years.
The other semi-crooked aspect of this joint venture is that all profits go to Goldman, while all losses are borne by the state of New York (for instance if the loan defaults and the foreclosure and the guarantee aren't enough to pay back the full loan). Privatized profits, socialized losses. Overall, it's a small program (just $30 million), but it's essentially a tax subsidy granted to Goldman courtesy of New York with the stated purpose of providing healthy food to low income residents (who, along with the grocery store owners and NYS tax payers, fund the subsidy to Goldman).
And somehow this dude from the ESD board is connected to hosting servers that feed into Bovada.
Which makes the whole operation seem even less reputable.
http://esd.ny.gov/BusinessPrograms/HealthyFoodHealthyCommunities.html
Side Note - the managing director at Goldman that lead this project was Alicia Glenn, who is now the deputy mayor of Housing and Economic development in NYC (appointed by De Blasio to increase low income housing options):
http://www.nytimes.com/2013/12/24/nyregion/de-blasio-taps-a-goldman-executive-as-deputy-mayor-of-housing.html.
http://therealdeal.com/issues_articles/city-halls-goldman-girl-alicia-glen/