Online Pirates of the Caribbean

Three San Francisco men found riches in Antiqua with their Internet gambling site. Now they're federal fugitives. Caribbean

Steve Schillinger is remembered by several traders as a gregarious, husky 6-footer from Chicago who worked the floor for 18 years. When Schillinger's name is mentioned, the reaction from his former colleagues is always the same -- a pause, followed by sly, knowing laughter, and a shake of the head. They loved or hated Schill, as he was known. But he was always upbeat, and possessed an incredible head for numbers.

"He was God," says one trader with graying Brillo pad hair. "He was a natural."

"A wheeler-dealer!" chuckles another named Terrence Pierce.

Steve Schillinger relaxes between bets in the World Sports Exchange office.
Courtesy of Haden Ware
Steve Schillinger relaxes between bets in the World Sports Exchange office.
Michael Miller



World Sports Exchange Visa and Mastercard accepted

World Sports Exchange gambling license
Certificate authorizing the establishment and operation of business in the Antigua and Barbuda free trade and processing zone.

Internet Gambling Prohibition Act of 1999
The full text of Sen. John Kyl's anti-gambling legislation

Gamblers Anonymous
The front page of refers people with gambling problems to GA.

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"Very street-wise," adds Brad Rucker, a trader who hung around with Schillinger when they were kids growing up in the Chicago suburb of Arlington Heights. "We hustled a lot of pool together."

"He's one of the smartest guys I know," smiles trader Rob Kovell. "Like a mad scientist."

Schill was an inspiration to other traders, says Bob Pagnini, because he always kept his cool under pressure. Even if he was having a terrible day, "he wouldn't show it emotionally. He's terrific at it."

People remember Schill for another reason. He was the undisputed king of the office pool. On the side, Schillinger took bets from fellow traders, making book on which movie was going to win an Academy Award, or what the verdict would be in the O.J. Simpson trial. The traders loved it, in part because it took balls to attempt such a thing -- right there, on the floor of the Pacific Exchange! And he remembered everyone's wagers, never writing anything down. He kept all of it in his head.

The informal gambling provided welcome relief from the stress, which traders handle in various ways. The younger ones blow off steam, charging through San Francisco bars, shooting off to Tahoe for a weekend of skiing. The older ones compartmentalize their stress, and try not to bring home all the bullshit to their families every night. Some burn out early and fade away, others sit simmering with thoughts of another way to make a living. As one says, "People are always looking for other avenues."

In 1996, Schillinger and fellow trader Jay Cohen decided their avenue out of the Exchange would be Internet gambling, on a scale nobody had ever seen. Their jobs -- buying in the morning and selling in the afternoon -- weren't much different than making book. The Internet gaming market appeared wide open, with little or no competition. The three men researched the legal issues, consulted with attorneys, and began talking to investors about launching a Web gambling site.

About the same time, the Exchange caught wind of Schillinger's betting operation, and noticed that he wasn't making as many trades as he once did. In-house regulatory staff asked Schillinger upstairs for questioning about his betting pools. "He declined to explain," recalls Exchange Corporate Affairs Vice President Dale Carlson.

But by then, Schillinger and Cohen had lined up financing for their next venture. All the pieces were in place for the company that would be called World Sports Exchange. Cohen phoned up Haden Ware, a 21-year-old floor runner and student, whose primary job every day was to fetch hamburgers at 10:30 a.m. for Cohen and Schillinger. Cohen told Ware they were going to the Caribbean. Did Ware want to come along? Ware said sure.

The three walked away from their jobs on the Exchange, confident that success awaited them on an island in the sun.

Antigua sits in the heart of the Caribbean, with Puerto Rico to the northwest, and Montserrat and Barbados to the south. Discovered by Christopher Columbus, the island achieved independence from the British in 1981, but the U.K. influence is everywhere, from the parliamentary-style government to a strange passion for playing cricket. Tourists come for the scuba diving and balmy weather, and the island advertises itself as the world's ideal honeymoon destination.

It's also ideal for gamblers.

With a population of just 80,000, Antigua -- and the neighboring islet of Barbuda -- bristles with Internet gambling. According to Antiguan government documents, at least 82 licensed online casinos and sports books operate there, with a long waiting list for gambling licenses. A hefty percentage of the world's total offshore gambling, hundreds of millions of dollars' worth, runs through Internet servers located on 108 square miles of beach and palm trees.

On the island's north coast, in an area called Blue Waters, sits the villa rented by Steve Schillinger and Haden Ware. Five minutes away, in a shopping mall, are the offices of World Sports Exchange, filled with 14 computers. Most workdays, the two sit in shorts and sandals in front of keyboards, watching sports on TV, taking bets from customers thousands of miles away. They gladly speak to reporters. Press attention never hurt before, and now, in an extended legal dispute with their own government, it can only help.

Schillinger, 46, says the idea for the operation was actually a combination of his Pacific Exchange betting activities and the computer acumen of Jay Cohen. Stocky, buff, with short dark hair, Cohen was a 29-year-old trader with a degree from Berkeley in nuclear engineering who noticed how the floor traders swarmed around Schill to bet on the O.J. trial.

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