Jonathan Arvay, a 38-year-old from Denver, was sentenced on December 20 by U.S. District Judge Gordon P. Gallagher to one year and one day in prison for operating and conspiring to run an illegal gambling business. The U.S. Attorney’s Office for the District of Colorado announced the sentence following evidence presented during the trial.
Arvay ran Player One Arcade in Denver, part of an extensive network of illegal gambling parlors stretching from Greeley to Pueblo. These parlors featured electronic gambling games that resembled arcade games and virtual slot machines, where customers accumulated credits.
The games led to a cryptocurrency called Obsidian Digital Asset Coin (ODAC), which customers could exchange for cash using an ATM-like “cryptocurrency teller machine” located inside or near the gambling parlors. However, the ODAC had no real value and only served to allow conversions to cash, with customers also required to pay a transaction fee.
Acting U.S. Attorney Matt Kirsch commented, “This was a modern version of old-fashioned illegal gambling,” expressing appreciation for the collaborative efforts of local and federal agencies in bringing Arvay to justice.
The case was investigated by the IRS Criminal Investigation Denver Field Office, which emphasized its commitment to tackling financial crimes and cybercrimes with advanced investigative techniques.