America’s Last Bookie Goes Down

Pughsley learned to gamble at a young age. At the time, he saw it as a way out of his home town of Auburn, Alabama. His father worked at the Chip-n-Saw mill, and the family struggled to get by. In high school, Tim began taking bets on football games from his classmates by selling parlay sheets for five dollars apiece. Any kid who picked five games correctly—with the point spread—won. The odds were abysmal, and Pughsley told me that no one ever won, but they kept betting—a lesson that he would not forget. He hid his profits in his bedroom.

On summer breaks during college, Pughsley got a gig selling books door-to-door in rural Iowa. He kept doing it after he graduated, and, in the summer of 1996, his younger brother Chris joined him on a bookselling trip in Pennsylvania. Chris found the work miserable. “We’d be knocking on doors,” he told me. “I’d get rejected a lot. And the rejection I took personally.” But Tim thrived on what he called “white-knuckling,” and he became so successful that he soon started recruiting other sellers, and got to keep a percentage of his team’s sales. After a few years of this, and a failed marriage, Pughsley moved to Birmingham and got a job as a sales representative at the data-analytics company LexisNexis but struggled to move up. Megan, his second wife, told me that she often wondered about how their lives might have played out if he’d had more success at LexisNexis. “He wanted to be a manager in that company,” she told me. Instead, Pughsley got back into gambling—this time at poker tables, and became a regular at high-stakes games around Birmingham.

The city had a thriving poker scene in the early two-thousands, with enormous jackpots exchanging hands in empty warehouses and office parks, and Pughsley quickly earned a reputation for being loud and cocky. “He was fearless,” Chris Donaldson, a poker player from nearby Trussville, told me. “He just had more money than everyone, and you knew it.” What Pughsley didn’t seem to have was friends. “I would say he wasn’t very well liked at that time,” Gary Rapp, Jr., another Birmingham local, told me. The guys called him Tall Tim or Ten Percent Tim. The latter was because “he would give everyone loans,” Donaldson said, “but he would charge them ten-per-cent interest.”

One night at the tables, Pughsley met a man named Tommy Hunt, who seemed unflappable no matter the size of the pot. During breaks, Pughsley learned that Hunt had set up a business in Costa Rica that hosted websites taking action on sporting events—a novel idea at the time; most bookies still took bets over the phone. Pughsley asked Hunt to host a site for him. He chose red44.com—because it was easy to remember, and to type into a browser. Then he set up a system that he had learned from selling books: Pughsley offered the men at the poker tables a slice of the action—not as bettors but as bookies. If they recruited gamblers to Red44, and managed them, they could make a profit, minus Pughsley’s cut.

Donaldson and Rapp were both interested—even though Donaldson had concerns. “It bothered me,” he said. “It bothered my wife.” But in the poker world lots of people were interested in wagering on sports, and it didn’t exactly feel illegal. At Red44, bookies were called “agents,” and recruited their own “sub-agents.” The gamblers were known as “players,” and the players multiplied faster than anyone expected, thanks to the first wave of agents.

In addition to Donaldson and Rapp, Matt Voorhees, a poker dealer in Colorado and a friend of Donaldson’s, joined early. Mark Giaquinto, a high-school teacher in Massachusetts, became a bookie after losing money to Rapp. Christos Galanis, known as Shug, and Chris Smith, known as Skinny Chris, joined, too. Shug and Skinny Chris were well known in Birmingham’s poker circles. And Skinny Chris helped bring in Chris Burdette, a former college baseball player, and his brother Nathan, a poker dealer in town. “I was kind of known as the degenerate,” Nathan told me later. He is heavily tattooed, and has a bushy beard and long hair that he often stuffs into a baseball cap. Back then, he said, he “didn’t have his shit together.” But he had a key role at the conferences that Pughsley began to hold for the agents.“Tim’s job was to get guys there and get them fired up to go get players,” Burdette told me. “My job was to get guys there and show them a good time.” While Pughsley planned seminars, Burdette lined up cocaine, ecstasy, and strippers. Soon, Pughsley and his crew had dozens of bookies reporting to them and thousands of people betting with them. “I knew it would be easy,” Donaldson told me. “But it snowballed into something that I couldn’t control, and in a hurry, I’m scared.”

A trip to Costa Rica, soon after the company took off, didn’t help. The top bookies were asked by Pughsley to bring ninety-nine hundred dollars each to give to Hunt, and Donaldson was shaken when they pulled up outside Hunt’s headquarters, in San José. “There’s a guy in a wifebeater standing out front with a sawed-off shotgun,” Donaldson said. “We told him we were there to see Tommy or whatever. And he led us into the room, which was Red44.” The agents each laid their money on the table, and an unidentified woman came in and scooped it all up. As the agents stood quietly, listening to an electronic money counter clicking away in the next room, Donaldson found himself thinking, What have we done?

As it turned out, Donaldson was worried about the wrong thing. The company’s downfall came not from its ties to the Costa Rican underworld but from Pughsley and the others’ failure to pay taxes. Since the nineteen-fifties, federal law has required bookmakers to file a Form 730 every month and to pay a two-per-cent tax on the total amount wagered—a process known as a “tax stamp.” The tax stamp was representative of the legal gray area that bookies occupied before sports betting was legalized and became commonplace across America: bookmaking was ostensibly illegal, but the feds still wanted a cut—an excise tax. Pughsley decided to ignore it. “Ultimately,” Pughsley said, “I felt like a tax stamp was basically telling the government I’m doing an illegal business.” Crucially, he also believed that they wouldn’t get caught.

In Alabama, local investigators at the Internal Revenue Service typically disregard the dealings of bookies. If they didn’t, they might not have time for much else. Alabama is one of eleven states where sports gambling remains illegal, yet, according to data compiled by the American Gaming Association in 2025, Alabama sports fans wager nearly a billion dollars every year with operators like Red44. “We used to say that bookmakers never die,” Tommy Spina, a longtime Birmingham defense attorney, told me. “They just change phone numbers.”

But Ezra Heath wasn’t a typical I.R.S. investigator. He’s a minister’s son, a former Eagle Scout, and a bit of a purist. “If you live in this country and enjoy the freedoms,” Heath told me, “you should pay the piper, pay your taxes.” He didn’t understand why bookies should be any different. Around 2018, a tipster sent an anonymous letter to federal agencies in Birmingham, which complained about a sprawling sports-gambling operation and named several people involved, including Pughsley and Hunt.

Initially, investigators didn’t pay much attention to the letter. Steve Gurley, then a lieutenant with the Vestavia Hills Police Department, outside Birmingham, told me, “At first glance, you’re, like, O.K., so what?” Then, late in the summer of 2018, a Vestavia Hills police officer pulled over a woman on a routine traffic stop. “She was a straight-up white-supremacy-type person,” Gurley said. She had prominent tattoos with far-right symbolism, and the police found illegal painkillers in her car. Gurley was called in to question her. “We talked to her about wherever she was buying,” Gurley told me. “If you get busted, to get out of your case, you’ve got to give us three search warrants. And she said, ‘O.K., well, I can buy cocaine from this guy over here, and I can buy pills from this guy, and I can buy pills from this guy. And, oh, by the way, he’s a bookie.’ And I sat up straight. I’m, like, ‘What do you mean ‘bookie’?”

Gurley began to tail the man she identified. In late October, he obtained a warrant for the man’s arrest, saying that he was known to be “in possession of four grams or more of hydrocodone,” and the police raided the man’s house. According to Gurley, the man was stunned. “I mean, he was crying,” Gurley said. “He’s like, ‘I cannot go to prison.’ ” So Gurley offered him a way out. He showed him the list of alleged bookies from the anonymous letter. The man said that he knew all of them. He soon agreed to work with the feds as an informant, and at that point, Gurley called Heath. “We’ve struck gold,” he remembered saying.

Pughsley learned right away that the bookie had been arrested on a drug charge. He said that the man told him about it soon after the raid. But Pughsley was unaware that the man had flipped, and he didn’t listen to others inside Red44 who wanted Pughsley to cut the man loose. Many of them had heard about the drug bust and didn’t want any of his heat on them. Pughsley seemed too distracted to listen.

Pughsley’s marriage to Megan was falling apart. He was lost in his personal problems, and, perhaps, blinded by greed. As of 2019, according to Pughsley’s estimates, the operation had twelve thousand active customers and twenty-four million dollars in profits, split among the collective. Pughsley had moved into a large house in Lake Heather Estates, the gated community near Birmingham, and had purchased a new Mercedes (license plate: C0NNCT). He was thinking about expanding his operation even further. But, in this moment, Pughsley threw himself into the thing he loved most: the annual Red44 conference.

“This year’s meeting is in Chicago from August 1st-4th,” Pughsley posted on the Red44 website, adding, “IMPORTANT: THIS IS A BUSINESS MEETING AND I EXPECT YOU AT ALL MEETINGS, MEALS, AND ACTIVITIES.” Pughsley had planned an exciting weekend. They would stay at a Hyatt Regency in downtown Chicago, kicking things off with a river cruise on Thursday night. They would attend the seminars all day on Friday, before convening for a pricey steak dinner, and on Saturday they planned to go to Wrigley Field in matching blue T-shirts emblazoned with a Red44 logo, hoping to get another group photo at an iconic ballpark. Only then, Pughsley said, would they be ready to start taking bets on another football season. “Fly home,” Pughsley wrote at the end of his itinerary. “Kick ass getting new players. August 24 season starts!!”

But, by the time people landed in Chicago, not everyone was feeling in the spirit. Chris Donaldson had stopped attending, troubled by what they were doing, and Gary Rapp was considering leaving the organization altogether, because of disagreements over how the money was divvied up. At times, Rapp said, they couldn’t sort out who was supposed to make what. “Because it was multiple levels, multiple different tiers,” Rapp said. “You had percentages from each person, and then Tim had a percentage of all that.” Bookies complained that Pughsley’s cut was too big. Many also thought that Red44 was becoming too public, too brazen, too loud, and no one was louder than Nathan Burdette.

Burdette, leveraging his brother’s connections with college athletes, and his natural inclination to bring the party, had recruited agents who were younger and more fun than Pughsley’s original crowd. And, unlike Donaldson, Burdette was still coming to the company retreat. He arrived for that year’s conference a day early to play a round of golf and to make additional arrangements for the weekend. “My job was to figure out the night clubs and book the V.I.P. sections,” Burdette said. “And get the ecstasy and the cocaine.”

There had always been a party element to the Red44 conferences, but now, in Chicago, the group was finally reaching a breaking point, partly owing to explosive growth on Burdette’s side of the business. By August, 2019, he had become an operation unto himself, with the party trailing behind him, and his wife, Haley, waiting for him in Cabo San Lucas when he was done in Chicago. Burdette told me that, at the time, he was mainly concerned about one thing: remembering not to fly to Cabo with the cocaine in his golf bag.

The retreat was madness—“just wild,” Rapp said—and the authorities were there to document all of it. As the conference began, Ezra Heath and Steve Gurley met up with the informant in a hotel room at the Hyatt, and sent him in with recording devices to document everything.

The devices were hidden in a pack of cigarettes, the informant’s watch, and a cellphone. Heath could tell that the informant was nervous. But soon Heath and Gurley, listening from the hotel room, heard Pughsley for the first time. He sounded like a real C.E.O. “He’s very arrogant,” Heath told me. “But he’s good at what he does. He knows how to make money.” More important, Pughsley admitted on tape that he knew Red44’s business was illegal.

Heath left Chicago with new information and leads. He assigned Gurley to follow Pughsley and set up a surveillance camera outside the gates of Lake Heather Estates, to document Pughsley’s comings and goings. He subpoenaed thousands of pages of financial records of the people they believed were involved. The same informant then infiltrated a second conference, in 2020. When that conference was over, Heath leaned on this man, unnamed in the court filings, for one final favor: he had the informant introduce Pughsley to an undercover federal agent who pretended that he was interested in becoming a bookie. “The goal,” Heath told me, “was to get our informant out of there.”

Months later, Pughsley took the bait. He met the undercover agent at a Buffalo Wild Wings near Lake Heather Estates. Federal authorities were sitting at tables nearby; Heath and Gurley were in cars outside. They snapped photos of Pughsley stepping out of his Mercedes with a laptop under his arm, and, once he was inside the restaurant, Heath listened in via a wire that the agent was wearing. Heath was hoping to hear what he called “Tim’s spiel” about the business. “He always gave it,” Heath said. “Word for word, he gives the same spiel.” When Heath heard the now familiar pitch, he knew that his undercover source was safe, and that Pughsley was in trouble: “It was, like, yeah, we got him.”

Heath hoped that the agent could worm his way even deeper into Red44. He had the kind of bland profile to pull it off. “He was basically your middle-of-the-road, middle-class white guy,” Voorhees, the bookie from Colorado, recalled. But something was off. Even Pughsley felt it, especially after the agent showed up at the 2021 Red44 retreat, in Houston, with a supposed girlfriend who raised suspicions. According to the other attendees who saw them together, her vibe was “exotic,” and his was cookie-cutter. This woman is way better than he is, Pughsley kept thinking. The couple also seemed a little too interested in what Pughsley had to say. Even after the seminars were over in Houston, and everyone was hanging out at an Astros game, the man and his girlfriend still wanted to talk about the business. It was another warning sign—and yet the guys kept sharing. Voorhees said that he “spilled his guts” to the man; Pughsley did, too. But by then it probably didn’t matter. Heath had compiled enough evidence to arrest all of them, and, in early September, 2022, he had finally heard enough.

Heath’s wanted to take Pughsley quietly and planned the raid for the first day of the N.F.L. season. Red44 was poised to have its most profitable quarter to date. In the previous two years, as legalized sports gambling exploded across America, while remaining illegal in Alabama, Pughsley’s outfit had doubled in size. It entered the 2022 football season with twenty-five thousand clients, and that season’s profits by the season’s end might have passed eighty million dollars. Burdette had estimated that he would make two million dollars alone.

But, even as Heath closed in on Pughsley, he had his sights set on one more target: Tommy Hunt. During his investigation, Heath had learned about Hunt’s computer servers in Costa Rica, and wondered how many more Tim Pughsleys were out there. “I wanted to get Tommy Hunt so we could get everybody,” Heath said. “Tommy Hunt had the key.”

On the morning of the raid, Heath, Gurley, and other agents disguised themselves as power-company workers to get into the gated community without creating a stir, knocked on Pughsley’s door, and identified themselves as law enforcement. Soon, they were standing in the foyer with a stunned Tim Pughsley, and, a short time later, at the kitchen table, Heath laid out his plan to Pughsley. The Red44 website would keep running, and the money would keep flowing, in order to draw out Hunt. Pughsley called his attorney, Tommy Spina, who advised Pughsley to coöperate. But at some point that morning Pughsley used his cellphone to alert Hunt, and the Red44 website was taken down.

Burdette was playing golf with a couple of other bookies when the website went dark. He knew right away that there was a problem. On the sixteenth tee, he learned that the feds had raided Pughsley’s house. “And so I just get in the cart and immediately ride home,” Burdette said. Haley, his wife, told him that the police would probably come to their house next, and her prediction came true. Early the next morning, the authorities were at Burdette’s door, this time without a ruse. Police lights flickered in the dark.

The U.S. Attorney’s office in Birmingham charged eleven men in the top echelons of Red44, including Pughsley, Donaldson, Rapp, Giaquinto, Voorhees, the two Burdette brothers, and four others, with a raft of charges that varied from man to man: excise-tax evasion, money laundering, and operating an illegal sports-gambling enterprise. Hunt escaped charges; Hunt’s attorney did not return calls for comment, and in an e-mail the I.R.S. declined to say whether Hunt remains under investigation. The defendants all eventually pleaded guilty, and, according to the I.R.S., the government recouped more than fourteen million dollars in restitution and additional millions in penalties and back taxes. Pughsley himself agreed to pay more than thirteen million—a figure that hinted at the size of the organization he had built. At his sentencing, last October, Catherine Crosby, an Assistant U.S. Attorney, called Red44 “the largest sports-betting organization that’s ever been indicted by the Department of Justice.”

But Crosby also admitted that bookies continue to prosper in Alabama. “It’s like whack-a-mole,” she said. “You stop one, then another pops up.” According to Burdette and Pughsley, some of the men who worked at Red44—and dodged indictment—are still taking wagers today, on different websites. And this landscape extends well beyond Alabama. Since the raid at Pughsley’s house, even as legalized gambling continues to take over American culture, illegal sports gambling has grown by twenty-two per cent. Last year, the American Gaming Association reported that U.S. sports fans wagered eighty-four billion dollars with illegal bookies and offshore websites, leading to an estimated billion dollars in tax losses.

In this context, Pughsley’s operation is a single drop in a deep green sea of money. And sometimes, Pughsley said, he sits at home—a bookie no more—and finds himself asking, why me? He specifically wonders why the government pursued criminal prosecutions against him and the other bookies when a case about excise taxes could have been handled in civil court? “All they had to do was come to me,” he said, ignoring the other charges against him. “And guess what? . . . I’d have just paid the money.”

In Pughsley’s mind, his real crime was that he was too good at what he did. He complained about inefficiencies at DraftKings, FanDuel, and other legal gambling platforms, and claimed that he could outperform those companies at scale. And he argued that most Americans today wouldn’t see him as a criminal. “What did I actually do that was so wrong?” he said.

But Heath sees it differently. “That’s what all criminals say when you catch them committing a criminal act,” he told me. “ ‘Can’t I just pay the money?’ ” Twice during the course of this investigation, Heath won the I.R.S. Excellence Award for his work. He retired from the agency in 2023 and now runs Magic City Investigations, a private outfit based in Birmingham. While Pughsley complains about the awards that Heath collected for the indictments, the other bookies sometimes complain about Pughsley. Voorhees and Giaquinto have struggled to find work. When I spoke to Giaquinto, he told me, “I thought Tim was somebody that cared—cared about me.” Other bookies are mostly disappointed in themselves. In 2022, just after the raids, Chris Donaldson was diagnosed with ocular cancer, which later metastasized to his liver. When I met with him, he told me that he felt a lot of guilt about the gambling operation. “I’m going to die of cancer before I recover from this,” he said. “And I did it. It’s my fault.”

Nathan and Haley Burdette, however, told me that they feel relief. At Burdette’s sentencing, last August, Haley told the judge that bookmaking had turned her husband into someone she didn’t recognize anymore. She worried that his drug use would kill him and said that she was preparing to leave him. Now Burdette is sober, and eager to help others. He recently launched the Parlay Project, a nonprofit to aid men addicted to sports gambling. Haley said that she wakes up every day grateful that the feds showed up on their doorstep. Pughsley told me that, even before the I.R.S. feds turned up, he was on a path to change, too. He was in therapy, and came to realize, he said, that “no healthy person is ever going to be a bookie.” A few months before the raid, he had met the requirements to become a licensed therapist himself, and today, he has his own practice. Pughsley told me that in this new role he has honed his ability to understand feelings, including his own. And, when he thinks about Red44, he told me, he feels something like pride. “I almost see it as a badge of honor,” he said. “Like, here I am.” He’s Tim Pughsley, and he used to be the biggest bookie in Alabama. ♦