Congressional Letter Supports AGA Request and Demands Action on Illegal Sports Betting

Legalized sports betting is expanding across the United States, as more than 30 states have legalized sports betting in some form since the Supreme Court overturned the federal ban on sports wagering in May 2018.

However, unregulated sports wagering still abounds: “Even though sports betting is legal in most states in America, the number of unregulated gambling sites in the country is still growing,” says Jeff Ifrah of Ifrah Law Firm.

According to studies, nationwide internet searches for offshore (illegal) sportsbooks increased by nearly 40 percent in 2021, surpassing total searches for legal ones. In an effort to combat the issue, the American Gambling Association (AGA) urged the Department of Justice (DOJ) to take action against illegal online sportsbooks and casinos as well as stop the use and spread of unregulated skill game machines.

Why Do Some Gamblers Use Offshore Gambling Sites?

Whenever prospective gamblers search for online gambling sites, some of the top results display rankings of various operators’ platforms, many of which are based offshore. As a result, many gamblers choose these offshore gambling sites unwittingly because they have been implicitly led to believe that the sites are reputable and widely used.

In other cases, more experienced gamblers deliberately choose unregulated betting sites. They do so because of enticing odds or promotions these sites offer in addition to the fact that these sites allow high rollers to gamble on credit and do not enforce bet limits since they are not behold to problem gambling limitations like lawfully regulated sites are.

For instance, an offshore betting website may allow a gambler to bet $50,000 or more on a single outcome, even without an upfront deposit. On the other hand, a regulated betting website usually has a much lower cap without the use of a credit mechanism. Such qualities tempt some to keep accounts with these offshore bookmakers despite the risks (e.g. wagers are not lawful so winnings are not necessarily guaranteed).

The AGA Submits Request to the DOJ

In April, the AGA requested that the United States Department of Justice (DOJ) take action against offshore betting operators. The letter to US Attorney General Merrick Garland specifically urged the DOJ to stop illegal online sportsbooks, casinos, and unregulated skill game machines.

The letter, signed by AGA CEO Bill Miller, outlines the threat that unregulated betting operators pose to consumers, state economies, and the legal gaming sector. The AGA claims that these unregulated operators prey on vulnerable, unassuming customers and provide them no consumer protections.

Furthermore, the AGA claims these unregulated operators do not ensure the integrity or fairness of the games offered and provide no economic benefit to states or tribal nations wherein wagers are made. As a result, the AGA urges the DOJ to protect American consumers by enforcing federal regulations in stopping illegal betting operations. Specifically, the AGA requests that the DOJ do the following:

• Continue to educate Americans about legal gaming options and the risk of unregulated betting operations.
• Investigate and prosecute the highest offshore gambling operations like MyBookie, BetOnline, and Bovada, which openly breach federal and state laws.
• Clarify that manufacturers of skill-based machines must adhere to Johnson Act registration requirements and Anti-Money Laundering standards. In addition, take aggressive enforcement actions against entities that do not fully comply.

The Congressional Support Letter for the AGA Request

A bipartisan group of congressmen has also asked the DOJ to ramp up its investigation and prosecution of illegal offshore sportsbooks. The congressional letter to US Attorney General Merrick Garland contends that offshore sportsbooks expose their customers to financial and cyber risks in addition to the fact that offshore sportsbooks lack protocols for dealing with money laundering, sports integrity, problem gambling, and age restrictions. Unregulated gambling operators also obstruct the efforts of the states to collect much-needed tax revenue from legal sports betting platforms by diverting customers.

The congressional group is primarily concerned that offshore betting will continue to proliferate if sufficient action is not taken, thereby augmenting the associated risks, even if legalized gambling options continue to become more widespread.

The congressional group wants the Justice Department to collaborate with the companies in the gaming industry, sports leagues, and other stakeholders to identify, investigate, and prosecute the largest offshore gambling operations. Another part of the collaboration also aims to educate Americans about the dangers of illegal sports betting, since many bettors may be unable to easily identify when a sportsbook offering is made by an off-shore operator.

The AGA Concerns and Its Current Measures to Address Offshore Gambling Providers

While the AGA applauded the congressional letter, the association also pointed out that the letter focused primarily on online gaming in the context of increasing sports betting legalization and neglected to address the rise of non-compliant gaming machines. To address this, the AGA reports that it, alongside the Association of Gaming Equipment Manufacturers, met with FBI officials on the subject.

According to the AGA’s report, FBI officials confirmed that the bureau is paying more attention to unregulated skill games, specifically whether they skirt federal law or conform to other types of illegal activity linked with their spread across America.

For its part, the  AGA is further encouraging state legislative and law enforcement action against the manufacturers of illegal skill machines which tend to capitalize on loop-holes in the relevant state law. As part of this effort, the association points to the recent Virginia legislative action to prohibit these machines as a model for other states to follow.

AGA Also Plans to Work With Google

Online searches for offshore betting sites have decreased in states where sports betting is legal. But the offshore website Bovada, for example, continues to account for half of all sports betting-related searches in the United States.

In many cases, the ease of access to these offshore sites confuses many gamblers, who may not even realize they are gambling illegally. According to some recent studies, this happens because the number of offshore betting offerings surpasses the number of legal ones. This is so because the gambling industry is heavily regulated—obtaining a license can be difficult and exclusive to a relatively few number of operators.

To combat one underlying cause maintaining offshore sportsbooks’ popularity, the AGA plans to collaborate with Google to restrict the web-results displaying offshore gambling sites. Doing so will ensure that illegal sports books are no longer as highly visible as they are now in regulated markets and thus incapable of grabbing the attention of unsuspecting and unwitting bettors.

Final Thought

Accompanying the expansion of legalized sports betting across the United States is a renewed effort to combat offshore gambling operators and sports betting platforms. As more than 157 million Americans now have or will soon have access to legal sports betting avenues, operators and industry stakeholders are keen to obstruct illegal parties from accessing the regulated industry. Doing so not only protects legal operators’ businesses but their customers as well as the reputation of the industry as a whole.

Have a tip we should know? tips@mediaite.com