The problem is this:
Most of BOS's funds came from credit cards. BOS's prided itself on credit card transactions going through - they used multiple processors.
Let's say BOS had all the money they needed to cover players funds.
A sportsbook probably takes in and sends out many times more than it holds in funds. I am simply guessing, but I would guess a sportsbook may take in and send out its entire funds every month or maybe every 2 months - someone who has booked bets would know, I have no idea.
In any case, credit card processor agreements allow them to hold transaction or debit the associated bank account for up to 6 months worth of transactions to cover potential chargebacks.
When you start a business, they usually hold 10%. As you build credibility and don't have chargebacks, the percent goes down to 5 or 1 or none.
If you get chargebacks, the amount goes back up. If the processor sees real risk (Like the DOJ indicts your business), the processor can debit your bank account for up to 6 months worth of charges.
Since this happened at 11PM, there is no way BOS could take their money out in the morning as the electronic debits to the processor would go through at 8AM or 9AM or whenever the bank opened long before they could pull out millions in cash.
Even if BOS only rolled over the money in the book every 3 months and only did 50% on credit cards, they would have lost every penny. I suspect the rolled it over more often and did more in credit cards, but whatever. All or a very significant amount of their funds were likely debited by the processing companies.
Now what will the processors do with this money? They will hold it for 180 days to cover possible chargebacks. Then any left will be given back to BOS. (Unless the US government finds out who the processors are and puts a hold on the funds because these processors may or may not be in the US)
Anyways, the problem is this - at this point, anyone who made a credit card charge to BOS in the past 6 months can charge back the charge. Some people obviously won and some people (Prob more) lost. It can be assumed given the current situation a lot of people who lost will do charge backs. Some will be thieves who have lost all, but some will be people who posted up $5000 and now have a $1000 balance at BOS. It would be impossible to explain this to your bank, but charging back the $5000 would go right through and likely be their easiest option.
Because of this when all is said and done, BOS will likely either get no money back from the processors or they will get very little. It is possible the processors might lose as well - this is a risk they take when they do business and charge their 2-3% fees.
As you can see, even if BOS had all post up funds on hand, it is likely that they now have none or very little. I highly doubt their are millions to abscound with.
So if you are in BOS's position with no money and no business, what do you do? You can't repay players as the DOJ states. You also will have a hard time paying lawyers unless you find some that want to make a name for themselves.
A few days ago, they said DC would get $1,000,000 bail, but first they needed to find a place to stay in St Louis - give me a break, Motel 6 is $45 and you get to keep your tight end... What they meant to say is we can't find $1,000,000 to pay the bail.
The whole situation is really screwed up.
In a best case scenario, players might see some funds come back once the 6 months is over if the DOJ does not seize them or put a hold on them. The amount will probbaly be pennies on the dollar based on what I said above.
Another possibility is that BOS really will fight - I say it is unlikely, but it is possible. They had to shut down their websites because they do not have the funds to pay everyone. If they posted that their processors had the money, people would call bullshit (Most people dont know anything about processing cards) This is not bullshit. At this point, BOS can say we shut down the sites as you asked. We did not transfer the sites. We paid back people for a day (They did) until we ran out of cash and all the other money is with the credit card processors on hold. IF (A BIG IF) BOS intends to fight the US government, this is how they would go about it by being able to say they are following the court rules, and IF (Another big if) they win there is a very small chance they could become profitable again and with a very slow payout, players could get paid.
Players who used credit cards in the past 6 months can get their money back (Up to the deposit per Visa/MC terms)
Players who did not use their credit card, I give about 5-10% of seeing any money in this situation in 6 months to 3 years from now.
-Sean
