Months ago we ran a story highlighting the shady practices of one Pitbull Poker.  They burst onto the scene, aggressively recruiting new players, offering $10 cash to anybody that would sign up for a Pitbull account.  They rocked a flash-based gaming platform that made gambling online convenient and accessible anywhere you could find internet access.  But it wasn’t long before Pitbull players wandered into the casino and took a wiff of something stinky.  Allegations of programmed bots sitting in at tables and superusers, capable of seeing other players’ hole cards were becoming more and more prevalant.  Pitbull refused to provide information on hand histories and before you knew it, Dimensus Ltd, the parent company of Pitbull Poker had dissolved with no clear owner or even base operations.  Pitbull claimed to be a Costa Rica-based online casino, but had also mis-represented themselves as being located in the UK.  They shut their doors, showing no intention of paying players what they were owed.

Now it seems that this dog has been put to sleep and the owners of Pitbull Poker have been arrested.  Proving that if it walks like a pitbull, barks like a pitbull and bites like a pitbull…it’s probably a shady online gambling organization.

The Pitbull Poker boss arrests occurred when night shift employees were told to leave so maintanance could be conducted on the building.  The strange and sudden maintanance set off a red flag to the employees who stuck around to see what was happening.  When they spotted a truck arrive and proceed to remove all of the equipment from the office, they knew something was up and alerted the police.  The owners were arrested by Costa Rican police and are currently being held as the employees  try to convince authorities that the owners are indeed a flight risk.

To this date, online gambling is completely legal in Costa Rica yet is not the subject of any government regulation or taxation. How a federal government can go this long without noticing a cash cow like that I don’t know. As an American, I certainly can’t fathom it. The U.S. government long ago figured out that they can make a killing off of marriages and deaths. Since most people get married at some point and everyone dies, the government decided taxing and selling licenses for both would be a great way to make money. And of course the current push in Congress to legalize online gambling has less to do with civil liberty than with giving the government beast more to devour.

Costa Rica, on the other hand, stands out as a shining example of a government that allows its people the freedom of online gambling without taking advantage of it for their own financial gain. However, in this global recession, all bets are off. That shining example may be no more. According to the newspaper AM Costa Rica, the finance ministry is planning to levy a tax on online casinos located in the country. The government estimates that they could raise up to $100 million by adding a tax to online gambling.

Opponents of the proposed new tax state that the burden placed on the online casinos could create more unemployment, with online casinos being an important part of the Costa Rican economy. The online casino industry is estimated to directly and indirectly provide 10,000 jobs within the country. Adding a new tax to an industry that, like most industries, is already hurting just doesn’t seem like a good idea. I would criticize the Costa Rican government for this power grab, but since my government has taken over the automotive and financial industries and has taken aim at healthcare, I don’t really have room to talk. So good news, Costa Rica: At least you’re not victim of Obamanomics.

Costa Rica is home to more online gambling companies than any other in the world. Is it because of their exotic locale and choice surfing? Of course not. The obvious reason is the country’s laid back regulation of online gambling. A proposed bill, set to reach the Costa Rican Legislative Assembly on August 3^rd, is aiming to add a 2 percent tax to income brought in by the online gambling industry.

Officially, Costa Rica is home to 46 online gambling sites, but there are countless more that operate off the radar. Lawmakers are hoping that the bill will bring in an estimated $85 million in revenue to the state, who like the rest of the world, is feeling the sting of the ongoing financial crisis. The bill would see further government to make sure that online gambling companies and those they are affiliated with, adhere to the new restrictions.

Regulation of the gambling industry in the past has not panned out so well for Costa Rica. A few years ago, Costa Rica began charging a licensing fee to online gambling companies. Only a few paid, many did not, and one that did (Legendz Sports) hightailed it out of there.

Regardless of success, the online gambling businesses are not doing back flips over this news. As with nearly every industry in the world, the economic crisis has taken a significant bite out of gambling worldwide. The gambling industry has seen its share of revenues fall and Costa Rican online gambling fears the tax will only contribute to further drops in revenue and lost jobs. “Activity has fallen about 35 percent, and in addition to that we have fewer work hours and have had to let go about 500 employees,” said Jorge Hidalgo, vice president of the Costa Rican Association of Casinos.