Denver man sentenced for operating illegal gaming arcade

DENVER — The Denver man convicted of running an illegal gaming arcade will spend the next year and a day in prison, the U.S. Attorney’s Office for the District of Colorado announced Thursday.

In September, a jury in federal court found Jonathan Arvay, 38, guilty of one count of conducting an illegal gambling business and one count of conspiracy to conduct an illegal gambling business.

Arvay ran the Player One Arcade in Denver, which was part of a network of businesses that spanned from Greeley to Pueblo. The business offered gambling games similar to arcade games and slot machines. Players would be paid out in the cryptocurrency Obsidian Digital Asset Coin, that would then be exchanged for cash at a cryptocurrency teller machine, resembling an ATM, next door or within the same business.

Players paid a transaction fee to exchange the cryptocurrency for money.

“This was a modern version of old-fashioned illegal gambling,” acting U.S. Attorney Matt Kirsch said in a press release. “I am grateful for our local and federal partners who helped put this criminal in prison.”

Denver7 Investigates reported on these arcades, also known as gray casinos, in 2022, showing how the businesses were going around the law.

You can watch our report on this below.

City leaders push to regulate so-called ‘gray casinos’ or adult gaming arcades

A 2022 state law allowed the Colorado Division of Gaming to investigatethe arcades operating outside the municipalities where gambling is allowed in Colorado.

In 2023, Denver7 Investigates also reported that Lakewood had shuttered three of theses arcades in the city.

Lakewood shutters 3 adult gaming arcades following Denver7 investigation

Arvay faced a maximum of 10 years in prison, $500,000 in fines and six years of unsupervised release.

“This sentence reflects an appropriate resolution to a complicated case: When you launder money and commit fraud against the government, the FBI and our partners will track you down across jurisdictions,” FBI Denver Special Agent in Charge Mark Michalek said in a press release.