A federal grand jury has convicted the operator of Player One Arcade in Denver on one count of conducting an illegal gambling business and one count of conspiracy to commit the same crime.

Matt Kirsch, acting U.S. Attorney for the District of Colorado, said Jonathan Avery, 38, of Denver was part of a network of illegal gambling parlors extending from Greeley to Pueblo that started in 2018.

Avery and two other defendants, Nathan Sugar and Jovan Walker, offered several electronic forms of gambling in the establishments through games made to resemble arcade and virtual slot machines, Kirsch said.

Customers could exchange winning game credits for a cryptocurrency called Obsidian Digital Asset Coin, which was then exchanged for cash by paying a transaction fee. 

“These gambling dens masqueraded as arcades with a veneer of legitimacy,” said Kirsch in a statement. “I am grateful to law enforcement for digging beneath the veneer and finding that these establishments were causing real harm in our communities.”

Sugar and Walker, face the same charges as Avery, but Sugar also faces three additional counts of money laundering. If convicted, Sugar could be forced to forfeit any property purchased with the profits from the illegal businesses, including a home worth more than $700,000.  

Avery’s sentencing is set for Dec. 12. He and Walker face up to five years behind bars along with a $250,000 fine. Sugar, because of the money laundering counts, could face more than 20 years behind bars and steeper fees tied to the properties involved in the crime.

The Colorado Department of Revenue’s Division of Gaming encourages residents to visit the PlayLegitCO website for resources on legal gambling options in Colorado.