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US Congress Calls on DOJ to Crack Down on Illegal Offshore Gaming Markets
By Jeff Osienya Jun 30, 2022 IndustryMembers of the US Congress are urging the Department of Justice to take a tougher stance on the ‘thriving’ illegal offshore gaming black markets. Join us as we take a closer look into what the legislators addressed in the call to action.A bipartisan group of 28 members of the US Congress has intensified the fight against illegal offshore gaming in the USA by penning a letter to Attorney General Merrick Garland. The legislators have raised the alarm that offshore illegal gaming markets are presently thriving, posing dangers to citizens and diverting revenue that would have otherwise gone to legal markets and the state.
The bipartisan lawmakers called upon the DOJ to increase scrutiny and prosecution of illegal offshore Gaming markets, particularly at this time, when operators continue to expand their reach within the US states. The members of Congress involved in drafting this letter mostly hail from 13 states that are currently directly impacted by gaming, including the likes of New Jersey and Nevada. Additionally, a section of the bipartisan legislators come from states anticipating the legalization of sports wagering like Ohio, California, and Texas.
The Dangers of Unrestricted Access to Offshore Gaming
As you’d expect, most of the grievances in the letter touched on the well-being of the constituents being represented. For instance, Congress members expressed concern that the illegal offshore gaming markets exposed their constituents to cyber vulnerabilities and financial exploitation. Similarly, the letter also pointed out that the rampant unlawful offshore gaming does not have protocols to address money laundering, sports integrity, or age restrictions – all of which could be guaranteed under a regulated environment.
The repeal of PASPA in 2018 lifted a blanket ban on sports betting countrywide, giving individual jurisdictions the liberty to regulate sports betting as they saw fit. Before 2018, only four states, Nevada, Delaware, Montana, and Oregon, had some form of limited sports wagering activity as they were exempt from the PASPA.
Since the repeal of the prohibitive law, the sports betting industry has grown faster than what many industry observers had anticipated, even in the face of the Coronavirus pandemic. Four years later, sports fans across all the 30 states with regulated sports betting have spent a whopping $125 billion on wagers. From the 12-figure handle, sportsbook operators have won an income of $8.8 billion, which has, in turn, generated $1.3 billion in tax revenue for the different jurisdictions.
However, despite the apparent commendable growth of the regulated sports betting scene, the Congress group worryingly noted that in 2021, there was an increase of 40% in internet searches for illegal offshore sportsbooks. Still, this may not necessarily be an ethical issue with the general population per se. Studies have shown that more than half of the consumers who placed their bets with illegal sportsbooks did so ignorantly, believing they were betting legally.
The letter rightly argued that the illegal offshore gaming markets do not offer the same responsible gaming functions, secure personal and financial information, and identity verification features that you’d find within a regulated framework. The Congress group did not mince its words on this matter, calling for the DOJ to flex its prosecutorial muscles in a heavily worded statement that read in part:
Quote“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.”
Specific Illegal Offshore Markets Mentioned
The Congressional letter was meant to be heavy-hitting, and it managed to do so in a no holds barred format. Operations like Bovada, My Bookie, and My Bet Online will bear the full brunt of the congressional letter as they are mentioned exclusively as illegal offshore markets. The Congressional letter calls for actions against such operations, saying:
Quote“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.”
The letter claims that the aforementioned names act under the guise of legitimate businesses when they very clearly aren’t.
The AGA Throws its Weight Behind the Congress Letter
The American Gaming Association (AGA), through its CEO Bill Miller praised the Congressional letter to the DOJ in its efforts to eliminate illegal markets. The US gaming industry trade body had itself back in April had reached out to Congress via a letter that was centered around several pillars.
First, the April letter called for the help of Congress in educating the public about licensed gaming platforms and the risks associated with illegal operations. The AGA letter also called for the investigation and indictment of the largest offshore gaming operators that blatantly violate state and federal regulation. Incidentally, this April letter resembles the congressional one in its heavy-hitting tone and the specific mention of companies believed to have broken the law.
Voicing AGA’s support for the bipartisan Congressional letter, CEO Miller took the opportunity to double down on the ills of the illegal offshore gaming markets. He also praised gaming caucus co-chairs reps for their support in the crackdown on illegal gaming markets, saying:
Quote“Offshore gambling websites are a significant threat to consumer protections and the economic benefits legal gaming provides for communities across the country. Eradicating these websites, and all forms of illegal gambling is one of AGA’s top priorities. After our initial outreach to the Department of Justice in April, today’s letter to Attorney General Garland demonstrates the broad interest in addressing illegal gaming. We are grateful to Gaming Caucus Co-Chairs Reps. (Dana) Titus and (Guy) Reschenthaler for their leadership and the Members who joined this call to action.”
The AGA has also expressed a willingness to continue working with allies on the Hill, the Sports Leagues, and the Department of Justice to prioritize robust enforcement and generally protect the American people from the black market. The NFL has also thrown its weight behind the congressional letter, with the league’s Vice President and Chief Compliance Officer saying in a statement:
Quote“We appreciate Congress’ continued engagement and join in urging the Department of Justice to address problems posed by illegal offshore gambling operators, an issue that affects all who care about the integrity of sports.”
Request for a Response by September
The Congressional letter to the DOJ included a request that the department responds by September 6th, 2022. With the date in mind, the letter also calls for the DOJ to advise any additional tools that the Congress can use to aid federal law enforcement action. The legislators also want the DOJ to ensure prosecutorial backing is committed to disrupting and demolishing the illegal offshore gaming operations.
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