A 38-year-old Denver man, Jonathan Arvay, has been found guilty of operating an illegal gambling business through an electronic arcade, according to a statement from the U.S. Attorney’s Office for the District of Colorado. Arvay, who managed Player One Arcade in Denver, was convicted by a federal jury on charges of conducting an illegal gambling business and conspiracy to conduct such a business.
At trial, it was revealed that the gambling parlors featured “games made to resemble arcade games, as well as virtual slot machines where customers attempted to earn credits.” These businesses were part of a larger network of illegal gambling parlors operating across the state.
Complex financial scheme behind illegal gambling operation
Acting U.S. Attorney for the District of Colorado, Matt Kirsch, condemned the illegal arcades, describing them as “gambling dens masquerading as arcades with a veneer of legitimacy.” Kirsch praised law enforcement for uncovering the truth behind these operations, which he said were causing harm in Colorado communities.
According to the U.S. Attorney’s Office, customers would play their chosen games and exchange credits won for a cryptocurrency known as Obsidian Digital Asset Coin. The cryptocurrency could then be converted into cash at an “ATM-like cryptocurrency teller machine” located next to the gambling parlor, with customers paying a transaction fee to complete the exchange.
FBI Denver Special Agent in Charge Mark Michalek detailed the extensive operation, describing it as a “large, complex illegal gambling operation, both online and in person,” with locations in Pueblo, Colorado Springs, Lakewood, Denver, Aurora, and Greeley. The FBI noted that the illicit proceeds from these operations were linked to crimes involving money laundering and fraud against the U.S. government.
The IRS Criminal Investigation Denver Field Office also highlighted the complexity of the scheme, noting that as “fraudsters devise new ways to evade tax liability and defraud the government,” special agents continue to develop new investigative techniques to track down illegal funds and hold offenders accountable.
Jonathan Arvay’s sentencing is scheduled for December 12.
