On Wednesday, 28 members of Congress wrote a letter to Merrick Garland, Attorney General of the US Department of Justice, expressing their concern that offshore illegal gambling sites are thriving, thus exposing US players to potential threats. The move has been welcomed by the gaming industry, which praised the call for investigation and enforcement.
In the letter, the Congress members requested that the DOJ make “a concerted effort” to fight illegal offshore sportsbooks. “These predatory operations expose our constituents to financial and cyber vulnerabilities; do not have protocols to address money laundering, sports integrity, or age restrictions; and undermine states’ efforts to capture much-needed tax revenue through legal sports betting channels,” the text reads.
American Gaming Association (AGA) President and CEO Bill Miller has now issued a statement on the Congressional letter, praising the call for action, while restating that offshore gambling websites are “a significant threat to consumer protections and the economic benefits legal gaming provides for communities across the country.”
“Today’s letter to Attorney General Garland demonstrates the broad interest in addressing illegal gaming,” Miller said on Wednesday. “We are grateful to Gaming Caucus Co-Chairs Reps. Titus and Reschenthaler for their leadership and the Members who joined this call to action. Eradicating these websites, and all forms of illegal gambling, is one of AGA’s top priorities.”
The letter to Attorney General Garland follows an initial outreach by the AGA to the Department of Justice in April. At the time, the trade association urged the DOJ to crack down on illegal online sportsbooks and casinos, and unregulated “skill game” machines.
“While the challenge of illegal gambling is not new, the brazen and coordinated manner in which it occurs—both online and in communities—has elevated this problem to a level that requires significant federal attention,” Miller wrote in April. “We urge the Department to make it a priority to protect American consumers, crack down on illegal operators, and enforce federal regulations.”
While sports betting was largely illegal for the last several decades, now 35 states and the District of Columbia allow regulated sports wagering. Over 157 million Americans have, or soon will have, access to legal channels to place their bets, with millions more in proximity to a neighboring state where they can wager legally.
“As this nascent legal market continues to expand, we cannot turn a blind eye to the fact that the illegal market is thriving and operating unfettered,” Congress members wrote this week. “These offshore operations, including Bovada, MyBookie and BetOnline, have developed sophisticated platforms that are nearly indistinguishable from those of legal providers.”
🚨 NEW: 28 members of Congress submitted a letter to @TheJusticeDept today encouraging investigation and enforcement action on the illegal gambling market.— American Gaming Association (@AmericanGaming) June 29, 2022
Our statement from @BillMillerAGA in support ➡️ https://t.co/nSJBxyHq6y pic.twitter.com/m3s6QDVgng
The call to action comes as internet searches nationwide for offshore sportsbooks increased by almost 40% in 2021, outpacing searches for legal ones, according to some of the latest studies. "These dangerous operators are not relegated to the dark web, but instead are easily accessed through any computer or smartphone,” Wednesday’s letter to the DOJ reads. “This creates confusion for many consumers who may not even know they are wagering illegally.”
Calls for a crackdown have gained momentum as of late. Stakeholders argue illegal sportsbooks do not offer the same responsible gaming functions, secured personal and financial information, and identity verification features that regulated products do. Additionally, illegal operators do not provide checks including time limits, budgets, or self-exclusion; nor do they adhere to federal or state financial regulations.
“We ask that the Justice Department work with the gaming industry, sports leagues, and other stakeholders to identify the worst actors, investigate and prosecute them, and educate Americans on the dangers associated with illegally wagering on sports,” Congress members said.
The Congresspeople also request that the Department provide a response by September 6, 2022, "outlining any additional tools from Congress that can facilitate federal law enforcement action and ensure prosecutorial support is dedicated to disrupting and dismantling these criminal organizations.”
Gaming Caucus Co-Chairs Guy Reschenthaler and Dina Titus
In response to this call for action, AGA’s Bill Miller said the industry looks forward to continuing to work with allies on the Hill, sports leagues and the DOJ to prioritize “robust enforcement” that will protect Americans from the predatory illegal marketplace. “Our country’s leaders are clearly and appropriately alarmed by the prevalence of offshore sportsbooks and law enforcement must act to identify the worst actors, investigate and prosecute them,” he added.
In its April letter, the trade association called for action through three pillars:
While the Congress members' letter focused mostly on online gaming, amid the nation's sports betting boom, it did not cover the growth of non-compliant gaming machines. However, the AGA says that, along with the Association of Gaming Equipment Manufacturers, it has recently met with representatives from the FBI on that front.
Thank you to Congressional Gaming Caucus Co-Chairs @repdinatitus and @GReschenthaler—as well as every member of Congress who signed this letter—for their leadership in fighting the illegal market. https://t.co/AbF6eQRqyO— Bill Miller (@BillMillerAGA) June 29, 2022
According to the association, the FBI officials confirmed there is "increased attention" on unregulated skill games within the bureau, "whether they are complying with federal law, and the types of other criminal activity that may be associated with their proliferation in communities across the country."
AGA, on its part, said it is seeking to prompt state legislative and law enforcement action on manufacturers of these illegal "skill" machines. The association cites recent Virginia legislature action to ban these machines as serving as "a model for other states to follow."
Legal sports betting operators have also expressed concerns in regards to a spike in black market activity within their vertical as of late. In May, FanDuel Group Chief Executive Amy Howe said that there is “a massive black market” that still exists, “probably to the tune of trillions of dollars.” And earlier this month, DraftKings’ CEO Jason Robins said there remains “a pretty prevalent illegal market,” with some of the biggest bettors “still pushing their action offshore.”