Sports Gambling Investment Fund

• The complaint, however, alleges that they used the majority of investor money to fund their lifestyles, pay commissions to brokers and agents, or make Ponzi-like payments to other investors. The complaint further alleges that they misrepresented to investors the investment performance of the funds that were actually invested in sports betting.
• Startups getting funds. Numerous startups in the sports betting space have been funded by venture capital firms. A sports betting startup called Action Network raised $17.5m in a recent funding round. This is a subscription service that will cover all forms of media for the sports betting sector.

Dozens of people across the U.S. Have invested more than $1 million in six sports betting funds all run by a Las Vegas resident who claims to have the secret sauce to crushing local books. Management's prior SPAC investments live up to that philosophy, spanning airline media and entertainment, specialty rental and hospitality services, and sports betting. Churchill Capital IV (CCIV.U).

The Securities and Exchange Commission today announced fraud charges against two individuals and six entities relating to an ongoing, Nevada-based $29 million sports betting investment scheme impacting over 600 investors from more than 40 states, as well as other charges against three individuals and a company who sold investments.

Sports Gambling Investment Funds

The SEC's complaint alleges that convicted felons, John F. Thomas and Thomas Becker, and several entities they control, promised investors 250% to 600% returns from pooled investments in sports betting, using what they claimed was a proprietary handicapping system. The complaint, however, alleges that they used the majority of investor money to fund their lifestyles, pay commissions to brokers and agents, or make Ponzi-like payments to other investors. The complaint further alleges that they misrepresented to investors the investment performance of the funds that were actually invested in sports betting. The complaint also alleges that Douglas Martin, Paul Hanson, Damian Ostertag, and a company owned by Martin sold unregistered securities without being registered as brokers or associated with a registered broker.

Sports Betting Investment Fund

The SEC's complaint, which was filed in the United States District Court for the District of Nevada on August 30, 2019, charges Thomas, Becker, Einstein Sports Advisory, LLC, QSA, LLC, Vegas Basketball Club, LLC, Vegas Football Club, LLC, Wellington Sports Club, LLC, and Welscorp, Inc. with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 ('Securities Act') and Section 10(b) of the Securities and Exchange Act of 1934 and Rule 10b-5 thereunder, and the registration provisions of Section 5(a) and 5(c) of the Securities Act. The complaint also charges Martin, Hanson, Ostertag, and Executive Financial Services, Inc. with violating the broker-dealer registration provisions of 15(a) of the Securities Act and the registration provisions of Section 5(a) and 5(c) of the Securities Act.

The SEC's investigation was conducted by Matthew Montgomery and Deborah Russell, and was supervised by Robert Conrrad. The SEC's litigation will be handled by Lynn M. Dean and Matthew Montgomery, and supervised by Amy Longo.