Federal Investigation Under Way into Illegal Cantor Fitzgerald Betting

Cantor Fitzgerald LP, the company behind Cantor Gaming, could be in more hot water as their top executive, Lee Amaitis, is under investigation by federal prosecutors. The investigation is in whether Amaitis participated in Cantor Gaming accepting illegal bets on sports in the US, after a former executive pleaded guilty to the same charge.

Michael Colbert – a former executive at Cantor Fitzgerald – admitted the charges in a federal court, but this latest investigation could shake the bond brokerage to the core.

Cantor Fitzgerald founded Cantor Gaming nine years ago, a venture far from their roots as a bond brokerage, despite regular investments in casinos by the financial world. Cantor gaming runs sportsbooks throughout the US, and has recently added mobile betting – in Nevada alone – to its portfolio.

With the federal investigation now moving further up the Cantor Fitzgerald chain of command, sticky times could be ahead for the brokerage and its gambling arm. Indeed, Cantor Gaming’s net revenue of $7.7 million in the first quarter of 2011 was a drop in the ocean for the parent company, and recent moves into the online and mobile world have faltered under pressure from major names.

Under American gambling laws, it is illegal to place bets from outside of the state in which the casino or sportsbook is located. The bets concerned were allegedly placed by an illegal gambling ring called the “Jersey Boys”, and based out of Queens in New York. Mr. Colbert was also arrested last year over the offenses, and charged in a Queens court, although the case was later dropped in deference to the federal case.

The Nevada Gaming Control Board has confirmed it has been looking into potential wrongdoing by Mr. Colbert, Cantor Gaming, and other senior executives at the company, however, a source close to Cantor have said there has been no contact with the gambling firm or its brokerage parent company about any investigation.