What to know about bookies amid the gambling scandal around Ohtani

Before he was fired by the Los Angeles Dodgers last week, Shohei Ohtani's longtime interpreter, Ippei Mizuhara, detailed to ESPN how he started betting with a bookmaker and accrued millions of dollars of debt.

Mizuhara told ESPN he met bookmaker Mathew Bowyer at a poker game and started betting on sports with him in 2021. Bowyer set him up with a line of credit and access to an online sportsbook site, Mizuhara said, adding that he placed bets on international soccer as well as the NBA, NFL and college football -- but not baseball. He said he had previously bet on DraftKings and assumed bets placed through Bowyer were legal.

Mizuhara initially told ESPN that he asked Ohtani to pay off his gambling debts, which had ballooned to $4.5 million, and Ohtani wired payments of $500,000 to an associate of Bowyer's over several months under Mizuhara's direction. But Mizuhara later changed his story and told ESPN in a subsequent interview that Ohtani had no knowledge of his gambling, debts or the payments. Ohtani then accused Mizuhara of theft.

Mizuhara did not respond when asked if he took money from Ohtani's accounts without his knowledge. It remains unclear if Ohtani's representatives have contacted any law enforcement agencies with their theft allegation.

Thirty-eight states and the District of Columbia offer legal sportsbooks, but a robust underground betting market remains prevalent, including in California where Mizuhara, Ohtani and Bowyer live.

The scandal has offered a glimpse into the secretive underworld of bookies and raises questions about why people continue to use them in the age of legal sports betting, how they operate and whether a bookie would allow a client such as Mizuhara, with relatively modest income, to go millions into debt. Here's what we know.

Is there still an underground market when so many states have legal sports betting?

With a lack of regulation comes a lack of visibility, so determining the size of the underground betting market and the impact of legalization, if any, is an inexact science. A veteran bookmaker told ESPN that the legal market has undercut the offshore market's clients. "Offshore will have to have lower pricing or better offers to exist," he said.

However, a report released this month by the Campaign for Fairer Gambling estimated that illegal sports betting operations generated $40.9 billion in gross gaming revenue in 2023 -- nearly four times the $10.9 billion generated by sportsbook companies licensed in the U.S. in 2023, according to industry trade group the American Gaming Association.

Why does anyone bet with a bookie instead of a legal sportsbook?

There are several possible reasons:

• They live in one of the dozen states that have not legalized sports betting, including California and Texas.
• Bookmakers often offer lines of credit, a huge incentive for bettors who do not want to put cash up front to wager.
• Bookmakers offer more anonymity than U.S. sportsbooks.
• Bookmakers may offer more favorable odds or higher betting limits than licensed sportsbooks.

How do bookies operate?

Long gone are the days of smoky backroom phone centers, where clerks picked up rotary phones and wrote down bets from customers with pencil and paper. Like most businesses, bookmakers operate online now.

There are two primary types of online sportsbooks that operate outside of U.S. regulations:

1. Post-up sportsbooks: These are the more commercially known sites like Bovada.lv and BetOnline.ag, which openly accept U.S. customers. They operate out of countries such as Costa Rica, Panama and Antigua, where they are considered legal businesses. The U.S. Department of Justice has accused similar sites of violating federal law by taking bets from customers in the United States. However, the World Trade Organization ruled in 2007 that the online betting ban in the U.S. was illegal. Online post-up sportsbooks continue to operate openly and remain a popular choice by some American bettors, including those who live in states that have not legalized sports betting.

2. Credit sportsbooks: Credit sportsbooks are more the modern version of the backroom bookmaker. They operate online and are commonly referred to as "pay-per-head" books, because the bookmaker pays the sportsbook website it uses to run their operation a fee per bettor or "per head." The website provides the software to manage the operation. Multiple sources told ESPN that Bowyer operated a credit sportsbook.

What are agents?

Agents are middlemen for bookmakers. They acquire new bettors and provide them a username and password on the sportsbook's website. The agent and bettor agree upon a settlement amount, up or down $1,000, for example, and the agents facilitate payments and payouts for their client list, commonly referred to as a "sheet." These transactions are handled bettor-to-agent, often in cash for discreet operations, but electronic transfers are not uncommon.

Agents are mostly not responsible for the risk; the bookmaker pays any winnings to the agent, who then distributes it to the bettors. Agents are typically compensated by the bookmaker with a percentage of the bettor's net losses, ranging from 25% to 35%, from their sheet. Low-level bettors are rarely in contact with the bookmaker and instead deal with the agents. Bigger players, however, may receive more personal attention from the bookmaker.

How do bookies recruit agents?

Many agents start out as bettors. A bettor may allow friends to place bets through them. Word spreads around college campuses, country clubs and pool halls, for example, about the access to a bookmaker and eventually, the person who began as just a bettor starts their own sheet and signs up as an agent for the bookmaker.

Mizuhara told ESPN he was paid between $300,000 to $500,000 annually before he was fired, and that he accumulated $4.5 million in gambling losses to Bowyer. Why would a bookie allow someone with that income to get into such a big hole?

A veteran bookmaker, who started answering phones for a booking operation around 1989 in New York and has been an offshore bookmaker for over two decades, told ESPN.com that he recalled very few multimillion-dollar debts during his career. However, he wasn't shocked by the losses attributed to Mizuhara.

"If he's been losing and paying, $500,000 here, another there, and you know who he's connected to, you're just going to let him go," the bookmaker told ESPN.

A source told ESPN that Bowyer was aware of Ohtani's name on the wire transfers but chose not to ask any questions as long as payments rolled in. The source also said Bowyer allowed people to believe Ohtani was a client in order to boost business. "He used to brag about it," a bettor who played with Bowyer's operation told ESPN.

Bowyer's attorney, Diane Bass, told ESPN: "Mr. Bowyer never met or spoke with Shohei Ohtani."

Adam Bjorn, a veteran of the international bookmaking industry who now oversees the trading for U.S. sportsbook Prime Sports, also said it's not unusual for a bookie to continue issuing credit as long as a well-funded bettor is paying. He agreed that running up multimillion-dollar gambling debts is a "very, very rare occurrence."

What is the history of MLB players interacting with bookies?

Baseball has seen multiple gambling controversies, most notably the Black Sox Scandal, where Chicago White Sox players allegedly conspired with gamblers to fix the 1919 World Series. And there was Pete Rose, MLB's all-time hits leader, who bet on baseball with a bookmaker and was banned from the game.

More recently, MLB fined Miami Marlins pitcher Jarred Cosart an undisclosed amount in 2015 for placing wagers with a bookmaker not licensed in the U.S. MLB's investigation did not find that Cosart bet on baseball.

In November 2022, former MLB All-Star Yasiel Puig admitted to federal authorities that he accumulated more than $280,000 in losses while wagering on tennis, football and basketball games through an agent for Wayne Nix, a former minor league baseball player turned bookmaker. Puig initially pleaded guilty to lying to federal agents but later withdrew his agreement. His case is before the 9th U.S. Circuit Court of Appeals.

Nix agreed to plead guilty in March 2022 to operating an illegal sports gambling business and filing a false tax return, and is awaiting sentencing.

What do we know about the federal investigation into Bowyer?

The same agencies that charged Nix and Puig -- the Department of Homeland Security, the IRS and the U.S. attorney's office in the Central District of California -- have been investigating Bowyer since at least October, according to multiple sources and documents reviewed by ESPN. Sources and documents show federal authorities raided Bowyer's home in October and seized cash, casino chips, banking documents, a money counting machine, multiple computers, portable storage devices and cellphones.

Information from Tisha Thompson and Paula Lavigne was used in this report. John Mastroberardino contributed to this report.