The American Gaming Association finally moved to officially call on the U.S. Department of Justice to crack down on unregulated sports wagering and online casino gambling conducted from offshore outposts, as well as the so-called “skill games” found in American bars and restaurants.
Targeting the robust offshore sports betting and online casino industry, Miller specifically called out major foreign gambling operators Bovada, MyBookie and BetOnline.
The multi-billion dollar regulated U.S. gambling industry encompasses a broad range of gambling, from brick-and-mortar casinos to online sportsbooks and iGaming. More than 30 states now offer legal sports betting and six of those have real money online casinos as well.
Illegal betting businesses — whether it’s the online sports wagering and internet casino operations housed in foreign countries, or in those “skill games” machines – eat at the revenues of legal gaming companies. Illegal wagering also adversely impacts tax collections and can pose a threat to consumers, the AGA argues.
The AGA, the trade group that speaks and lobbies on behalf of much of the gaming industry in America, has long complained about illegal operations, mainly calling on the betting public to avoid them. More recently, though, the AGA has acknowledged that it’ll take a combined effort by state and federal law enforcement to crack down on the thriving, highly-organized illegal gambling industry — especially, the businesses on foreign soil.
On Wednesday, the AGA sent a public letter to the DOJ encouraging it to go after the “pervasive” illegal operations.
In a lengthy letter to U.S. Attorney General Merrick Garland, AGA CEO & President Bill Miller wrote:
“The Justice Department is the only law enforcement entity that can credibly address these illegal offshore sportsbooks and casinos. The AGA recognizes and appreciates the enforcement challenges associated with this form of transnational crime and is grateful for the FBI’s recent public service announcement to better educate Americans about the dangers associated with illegal gambling operations. However, the pervasiveness of this illicit activity requires more sustained attention and action from the Department.
“While prosecutions and convictions may be difficult to secure, the AGA firmly believes that the Department can make a strong and meaningful statement by investigating and indicting the largest offshore operations that openly violate federal and state laws.”
The letter also comes at a time when the gambling industry is bouncing back from the COVID-19 epidemic that saw casinos shuttered across the country. Online gaming became more attractive at that time.
Miller also addressed a domestic threat to the fully licensed gaming industry, namely the “skill games”, which Miller described as mimicking traditional slot machines and are found in bar/restaurant businesses and social clubs. Some state government officials have engaged in ongoing battles trying to decide how to treat such machines.
“Regardless of any perceived ambiguity under state laws that these device manufacturers are attempting to exploit or circumvent, it is clear these machines meet the federal definition of a gambling device,” Miller wrote. “Therefore, those engaged in the business of manufacturing, repairing, buying, selling, leasing or using these gambling devices that enter interstate or foreign commerce should be required to file a registration with the Department annually, as required by the Johnson Act.”
Miller was referring to a federal act that deals with the recordation of gambling devices.
The gambling industry consistently argues that illegal gaming of any kind is a threat to consumers who may frequently be confused by what it a licensed, regulated operator and one that operates outside the bounds of regulation and licensing. The unregulated gambling business offers little or no help in controlling dysfunctional gambling, little protection for the players’ personal and financial information, and “have also been known to at times simply disappear, walking away with their customers’ funds in the process,” the AGA said.
Of course, legal gambling operators are also harmed financially by the competition, which doesn’t have the expense of regulation compliance and does not pay taxes.
The AGA describes itself as the premier national trade group that represents the $261 billion U.S. casino industry. Membership consists of more than 70 commercial and tribal casino operators, U.S.-licensed gaming suppliers and equipment manufacturers, sports wagering operators, financial institutions and other stakeholders in the gaming industry.