A federal judge has ruled that key elements of casino operator Caesars Entertainment’s proposed financial restructuring likely violated federal law. In a ruling in Manhattan federal court last Thursday, US District Judge Shira Scheindlin (pictured) rejected an attempt by Caesars to quash a lawsuit brought by junior creditors who feel they’re being unjustly treated via Caesars’ financial rebirth.

The creditors had sought to reverse Caesars’ shifting of certain profitable assets out of its debt-laden Caesars Entertainment Operating Co (CEOC) division, thereby shielding these assets from creditors ahead of CEOC’s bankruptcy filing. The junior creditors also protested Caesars’ claim that its sale of 5% of CEOC to undisclosed institutional investors had alleviated CEOC of honoring its debt obligations to these junior creditors.

In her ruling, Scheindlin referred to Caesars’ elimination of its debt guarantees as “an impermissible out-of-court restructuring.” Scheindlin said Caesars’ gambit was “exactly” the type of shenanigans that the federal Trust Indenture Act of 1939 was “designed to prevent.”

Caesars had never denied the factual nature of the plaintiff’s allegations but insisted that the junior creditors had no right to sue because the company had yet to default on its debt payments. But Scheindlin cited a previous case that ruled transferring assets and eliminating guarantees “constitutes an impairment of the right to sue for payment.”

Caesars spokesperson Stephen Cohen sold Bloomberg that it disagreed with Scheindlin’s ruling because it was “based simply on the plaintiffs’ allegations.” With the suit still pending, Caesars has no ability to appeal the ruling unless Scheindlin gives them permission.

Caesars’ plan to convert CEOC into a real estate investment trust has received the support of most of its senior creditors, who would receive equity in the new REIT to the tune of 92¢ on the dollar. Junior creditors holding over $5b in second-lien notes would receive only about 10¢.

CEOC filed for Chapter 11 bankruptcy in Chicago last Thursday (15), just days after junior creditors asked a Delaware Chancery Court judge to push CEOC into involuntary bankruptcy. Shortly after Caesars filed in Illinois, Delaware Judge Kevin Gross ordered the Chicago bankruptcy proceedings to be put on hold to give him time to determine which court had jurisdiction over the matter. None of this affects day-to-day operations at any of Caesars casinos across the United States.

Montreal police have arrested one of their own for his alleged involvement in an illegal bookmaking ring with ties to organized crime. Early Thursday morning, units of the Royal Canadian Mounted Police, Sûreté du Québec, municipal police departments and the Canada Border Services Agency conducted a series of raids at 16 locations in Laval, Québec City and Blainville following a two-year investigation.

Eleven individuals were arrested, including Sgt. André Thibodeau, a 25-year veteran of the Montreal police force, while a warrant is out for a 12th suspect. The accused are facing charges of illegal bookmaking, conspiracy and gangsterism. Thibodeau, who has been suspended without pay, faces additional charges of abuse of confidence and obstruction of justice.

Montreal police Cmdr. Ian Lafrenière said officers had “seized a lot of money” in the course of their raids and that the betting operation was no small time outfit. “The biggest bet recovered by investigators is $125k.” Lafrenière said the investigation is ongoing.

Police say they first got inklings of Thibodeau’s conflicted loyalties after fellow officers told internal affairs that Thibodeau had some “bad friends.” Among those arrested was Natalino Paccione, who was previously arrested for bookmaking in 2006 as part of the Project Colisée investigation. In 2011, Paccione was fined $20k for his involvement in the Montreal Mafia-led bookmaking operation.

Thibodeau is believed to have conducted activities on behalf of the betting operation while he was on duty. Lafrenière lamented the fact that an officer had apparently been playing both ends of the street but celebrated the fact that it was other officers who helped expose Thibodeau’s activities. “If it proves anything, it is that there is no Omerta in the police.”

LOUISIANA BOOKIE SENTENCED AFTER IN-LAW RATS HIM OUT

South of the border, an online credit bookie was handed an eight-month prison sentence by a federal judge on Wednesday. Frank Frabbiele pled guilty last year to charges of money laundering and violating the Wire Act for processing wagers via a Costa Rica-based pay-per-head online betting site, while settling up with customers in person.

Authorities in Thailand are trying to get to the bottom of a curious case involving Bangkok police and a ring of alleged South Korean online gambling operators. Earlier this week, local media reported that seven police officers – including two inspectors – were being investigated over allegations that they’d kidnapped three South Korean nationals and held them for ransom until the other members of the Koreans’ illegal online gambling ring paid them Bt 2m (US $61k).

The allegations came at an inopportune time, given the country’s ongoing investigation of several senior officials in the Crime Suppression Division (CSD) accused of soliciting bribes from a massive illegal online sports betting ring.

On Friday (9), the CSD received a complaint from some South Korean nationals that three of their countrymen had been kidnapped. A CSD team was dispatched to investigate but the three Koreans were eventually found unharmed at the Seacon Square shopping complex. The three claimed they’d been released after paying some money to their kidnappers.

On Tuesday, the picture became somewhat clearer. Police now say the three South Koreans were detained during a raid on a condominium after a tip-off that the condo was hosting an illegal online gambling operation. The three suspects were taken into custody then released after questioning, after which the three claim to have been kidnapped by two other South Korean nationals.

The three abductees said they paid their kidnappers Bt 500k from funds they had at the condo and contacted their relatives to transfer a further Bt 200k to the kidnappers’ bank accounts. The spooked relatives contacted the police, a fact that somehow became knowledge to the kidnappers, who then released their hostages at the mall.

On Tuesday, police issued an arrest warrant for one of the alleged kidnappers and are awaiting a warrant for suspect #2. However, the Bangkok Post reported that investigators are still trying to determine why the police who raided the condo brought along a civilian interpreter rather than a police translator, suggesting the cops may not be completely off the hook just yet.

Belgian gaming regulators have put online gambling operators on notice that all live-dealer casinos must be based within the country’s borders. The Belgian Gaming Commission (BGC) issued a notice on Jan. 7 stating that it has decided to enforce an existing edict banning all live-dealer casinos that beam their signals in from abroad.

All Belgian-licensed operators currently offering an online live dealer option have been given until Friday (16) to make their identities known to the BGC. A meeting will be held in February at which decisions will be made as to which operators’ live dealer offerings are considered above board. Those that can’t demonstrate their inherent Belgian-ness (Belgianity? Belgianosity?) can choose to either switch to a local live dealer supplier or stop accepting live dealer wagers from Belgian gamblers.

The BGC is one of Europe’s more tightly wound regulatory bodies, routinely adding names to its online gambling blacklist, seizing funds and arresting executives of unapproved operators and even having a go at social gaming, all the while asking for even more powers with which to bring rogues to justice.

The BGC also announced that it intends to more “clearly define the procedure for new games.” The BGC says a new procedure for approving online gambling games was needed to the “exploitation of online slot games by a B-licensee.” (B-licenses cover online gaming arcades.) Any operators who have doubts as to the legitimacy of a new game can submit the game for inspection, which the BGC promises to handle within two weeks of receiving the necessary material.

A group of the Las Vegas Strip sports books have banded together to lobby the Nevada Gaming Commission to legalize bets on Olympic events.

As it stands now, Olympic betting is still illegal in Nevada, largely because of its classification as an amateur sport. But that could change if a group of Las Vegas sportsbooks emerge successful in their bid to have Olympic betting legalized in the state in time for the 2016 Summer Games in Rio de Janeiro.

A lot of Vegas books have been clamoring for Olympic betting to be legalized, due to the demand for action during the Olympics, especially from foreign visitors. According to the books, the age-old argument of amateur players playing in the Olympics has become irrelevant, especially when you have NBA stars like LeBron James and NHL stars like Sidney Crosby participating in men’s basketball and men’s ice hockey events, respectively.

There’s also that part about putting Nevada at what CG Technology VP of risk management, Jason Simbal, calls a “competitive disadvantage,” referring to online sportsbooks who are free to offer bets on the Olympics.

“We have a lot of people, especially our international visitors, who come here and are surprised they can’t bet on the Olympics,” Simbal told USA Today.

If Olympic betting were legalized, Vegas sportsbooks could begin offering odds on popular sports like basketball, hockey and soccer, which are played by professional athletes from their respective sports, not amateurs.

In addition, betting on sports like swimming, figure skating, and track and field would also become legal, allowing bettors to place bets on the likes of Usain Bolt and Michael Phelps in any Vegas sportsbook.

A Little League Coach has avoided jail time, in connection with an illegally run poker game in Staten Island, after a Federal Judge sentenced him to two years of probation.

It seems the New York Federal Judges aren’t as crazy as some of the laws they have to abide by.

Little League Coach, Justin Doyle, 39, has avoided jail time for his part in an illegal poker ring operated in the Staten Island area, after a Federal Judge sentenced him to two years probation.

Doyle was one of 15 people arrested in 2011, after Queen’s District Attorney’s office overheard a wire tap where an undercover NYPD Narcotics Officer talked about the game known as the ‘The Press’.

All but two of those arrested were from Staten Island, and most of them have taken plea deals, after their three-year ordeal. According to press reports, the ringleader of the game was a funeral director called Joseph Fumando. The man known as ‘The Undertaker’ was convicted at trial and will be sentenced in March.

Throughout his ordeal Doyle maintained the backing of his Little League President, George Quinn. And after sentencing he had this to say:

“Obviously, we all make mistakes in our lifetime, some bigger than others, but how we respond and recover from those mistakes defines us. Justin, I believe, will continue on this path of nurturing our youth, being very successful at it and he will move forward in making an impact on many young men for many years ahead.”