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How Illegal Sports Betting Actually Works | How Crime Works | Insider

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Overview

Owen Hanson, an ex–USC football player turned illegal sports betting operator, describes how an offshore, cartel-linked sports betting business allegedly operated in the U.S. from roughly 2007 until his arrest in 2015. He argues that illegal betting persists largely because it offers customers credit and discretion that legal sportsbooks do not.

Entry Into Illegal Betting (2007–2013)

  • 2007 recession: Hanson says he began illegal sports betting after losing a real estate job.
  • Using USC connections: He claims he leveraged a network he built while at USC.
  • Working within an established operation: He describes earning commissions and learning core mechanics, including:
    • moving lines
    • answering VIP calls
    • building a referral-based client base
  • After a 2013 bust: Hanson claims his customer network grew quickly, and he launched his own operation from Costa Rica, using:
    • websites
    • an 800 number
    • call centers
  • Nationwide scaling: Over time, he says the business expanded across the U.S.

“Core Difference” Between Legal and Illegal Betting

Hanson frames the central distinction as follows:

  • Illegal bookmakers (offshore)

    • extend weekly “lines of credit” (resembling revolving credit)
    • allow bettors to wager first and pay later after games are settled
    • if customers don’t pay, Hanson describes enforcement tactics such as:
      • collectors
      • intimidation
      • pressure via family

  • Legal U.S. sportsbooks (apps and payment upfront)

    • customers typically fund accounts via deposits/credit cards up front
    • Hanson claims legal operators don’t extend the same kind of credit line in the same way

Customer Incentives, VIP Handling, and Scaling Tactics

Hanson describes business practices aimed at keeping high-volume customers engaged:

  • Discretion and VIP focus: Especially for athletes and celebrities, he claims his operation was discreet.
  • Fast payouts: He says winners were often paid Monday, encouraging re-bets.
  • “Whales” and referrals: He describes large bettors (“whales”) as driven by personal referrals, including athlete connections from his USC network.
  • Highest bet: He claims the largest wager he took was a quarter-million-dollar Super Bowl bet.
  • Promos vs. credit: He says his operation offered perks similar to sportsbook promotions (e.g., “free play”), but often framed them as credit/advances rather than standard deposits.

Alleged Money Laundering and Offshore Movement

A major theme is Hanson’s alleged account of money laundering methods:

  • Gold/silver and “shell” structures

    • converting cash into bullion to ship or wire internationally
    • using shell structures to disguise proceeds

  • Offshore banking and international transfers

    • Hanson references offshore banking approaches (including banks such as the Bank of China, as claimed in the transcript)

  • Cash movement via business infrastructure

    • he describes strategies involving businesses like ATM networks to reduce scrutiny

  • Anecdotal smuggling example

    • an example is provided alleging money smuggled out through goods (e.g., UGG boots allegedly containing gold) in Australia

Hanson also claims the operation became intertwined with a cartel operation, at times involving both betting and moving cartel money, using:

  • encrypted communication
  • intermediaries

Alleged Links to Cartel Logistics and Drug Trafficking

Hanson further claims his operation overlapped with drug trafficking and cartel logistics:

  • he describes a lifestyle where gambling and drugs overlapped for VIP clients
  • he says he shipped narcotics internationally

Arrest, Prison, and Cooperation

  • Federal prison: Hanson says he went to federal prison and describes it as “life-saving.”
  • Asset forfeiture: He claims the government forfeited significant assets.
  • Cooperation: He says he cooperated with authorities was offered, but that he refused.

How the Market Evolved (Legal Growth vs. Ongoing Illegal Niche)

Hanson comments on the evolution of sports betting:

  • Legal expansion: He frames legal betting growth as state-by-state expansion, referencing the end of the federal ban.
  • Shift to apps and live wagering: Betting increasingly moved to mobile platforms and “live wagering.”
  • Why illegal still “thrives”: He argues illegal operators persist because line-of-credit structures and customer credit arrangements remain difficult for legal operators to replicate (as he claims).
  • Bitcoin as a suspected payment method: He notes Bitcoin as a suspected tool for illegal payments, and that he personally declined it at one point.
  • Permanent niche: He emphasizes his belief that illegal bookmaking will retain a niche even as legal betting becomes ubiquitous.

Social Commentary and Personal Consequences

Near the end, Hanson broadens to consequences and personal reflection:

He frames sports betting as an addiction and describes a personal arc from “hustle” to regret.

  • Redemption efforts: He says he now focuses on redemption work, including:
    • a protein brand
    • a book/documentary work
  • Warning to others: He warns that people from ordinary backgrounds can be pulled into organized crime through:
    • pressure
    • status
    • quick cash

Presenters / Contributors

  • Owen Hanson (main narrator)
  • “How Crime Works” producer (producer role credited in closing)

Original video