Picture a tiny Caribbean island with only seven working stoplights announcing to the world that it will become the Las Vegas and Atlantic City of Internet gambling. Gyneth McAllister, the woman who boldly made that prediction for her native Antigua two years ago, wishes she'd kept her mouth shut.
McAllister, 40, Antigua's cocksure director of offshore gaming, told SI (Jan. 26, 1998) that her nation would also do something U.S. authorities said couldn't be done: regulate the fledgling online gaming industry. McAllister said Antigua could maintain control "by keeping bad guys out and making sure players get paid," while everyone—including her cash-strapped government—took in lots of money.
McAllister made good on half of her boast: Antigua is now the hub of Internet gaming. Some 850 Web gambling sites are based there and an estimated 80% of all gaming URLs on the Web can be traced back to servers on the 108-square-mile island.
McAllister, however, isn't crowing about it. Instead she and her four children are in hiding near Washington, D.C. They fled Antigua this summer after McAllister received what she says were death threats linked to her efforts to "eliminate the possibility of money-laundering and provide real regulation" in her nation's online gambling industry. "I was told I'd be killed if I continued," she says.
In February, McAllister proposed tough new regulations for Antiguan sites. The move came after a U.S. Treasury Department advisory warned bankers that Antigua's lax financial regulations made it easy to launder money there. In response, Antiguan officials tightened standards for banks. McAllister wanted websites to follow suit. She proposed attaching audit servers—"black boxes"—to sites to monitor bets and flag large transactions, which often signal money laundering.
Several site owners balked and threatened to move their shops—each of which pays Antigua an annual licensing fee of $75,000—to nearby islands. Over the next couple of months McAllister says she got two telephone death threats and that someone broke into her house and rummaged through her files. "I became afraid to leave my home," she says. "When someone calls and says, 'I'm going to kill you,' it changes everything you do. I had to get out." Before fleeing, she reported the incidents to police, who investigated but came up with no leads.
U.S. officials say the threats are no surprise. "We predicted they'd have problems with people who have interests in that business," says Jonathan Winer, a former State Department deputy assistant secretary for international narcotics and law enforcement affairs.
Site operators in Antigua, however, dismiss McAllister's claim that she was threatened by one of their own. "I don't believe it," says Bill Scott, founder of World Wide TeleSports, the island's largest sports betting firm. "We know everyone in the industry. There are no tough guys, just nice people doing business."
Site owners say they welcome Antiguan government oversight, because it provides a seal of integrity. They say they wouldn't mind having transactions audited, but that the black boxes would be too invasive, enabling the government to obtain customer lists and other proprietary information. Fearful of losing sites, Antigua scrapped the black-box idea after McAllister's departure.
Prime minister Lester Bird disputes the suggestion that his nation isn't scrutinizing gaming sites—and operators—closely enough. "Our goal is to have the highest regulation in the world," he says. "We only want good people here and won't allow anyone who has a criminal record to have a license."