A coalition of US attorneys general is calling on the Department of Justice (DOJ) to intensify its enforcement efforts against offshore gambling. The bipartisan group recently sent a letter to Pam Bondi, the US Attorney General.
The concern is that many unlicensed, foreign-based online gambling platforms still operate. The letter outlined the many ways in which offshore gambling markets have infiltrated the US market. The AGs want a crackdown on unlawful sports betting and gaming platforms that don’t operate under the bounds of U.S. law.
Financial implications for states
Pennsylvania’s Attorney General, Dave Sunday, is one of the AGs pushing for a federal crackdown on illegal casinos. He believes these illegal offshore gaming operators have only one goal: to get more players and, consequently, increase their profits. They don’t care about rules and regulations. The problem is that they take players away from regulated online casinos.
States with legal casinos must invest considerable resources in responsible gambling and protecting consumers. Illegal casinos don’t have to do this, which means they can undercut legal casinos. Allowing these illegal casinos to operate has financial implications for states. The coalition cited estimates that offshore gambling accounts for as much as $400 billion annually in wagers. This deprives states of over $4 billion in annual tax revenue that they can earn from legal gambling.
Risks for players
Illegal casinos often don’t verify the ages or identities of players. By bypassing licensing requirements, they can act in ways that offer consumers little to no protection. This can put vulnerable individuals such as minors and those with gambling disorders at risk. They are exposed to fraudulent schemes and can gamble addictively without any oversight or accountability.
With the role of AI in responsible gambling today, legal casinos have ways to pick up at-risk players and offer interventions. This doesn’t happen at illegal casinos, as they don’t have to comply with any regulations.
Links between offshore gambling and criminal activity
The letter drew attention to the fact that offshore gambling is associated with criminal activities such as fraud and money laundering.
Regulations are becoming more and more of a priority in casinos all over the world. For example, casinos in Asia adopt distinct regulatory frameworks depending on the country they operate. Illegal casinos that fall outside of the law undermine the integrity of legal casinos. They are ripe for abuse by criminals of all kinds who aren’t subject to any restrictions.
Recommendations
To address the problem of illegal casinos, the AGs suggest that the DOJ use all the enforcement tools at its disposal.
The DOJ could use the Unlawful Internet Gambling Enforcement Act (UIGEA) to get injunctive relief against illegal websites and payment processors.
It could also seize assets under federal statutes like 1955(d). It could target the domains, servers, and profits associated with the illegal operations. The coalition argued that there was a precedent for doing so in cases like cybercrime and counterfeit goods that could also apply in this case.
Payment processors such as Visa and Mastercard have both stated their willingness to investigate illegal gambling. The coalition suggests that the DOJ could collaborate with them. Cutting off the access of illegal gambling operators to the US financial system could help shut them down.
A Congress FY24 appropriations directive stresses the importance of cracking down on illegal online gambling. The coalition drew attention to this and the need to ramp up action against illegal gambling. State officials are willing to work together with federal agencies to formulate and put in place a suitable enforcement strategy.
