- Gaming industry awaits federal response on offshore gambling
- State regulators joining industry, Congress in urging crackdown
It is not as though U.S. Attorney General Merrick Garland does not have other priorities but his refusal to even acknowledge pleas for help in cracking down on illegal offshore gambling is growing more puzzling.
More than a year ago on April 14, 2022, American Gaming Association (AGA) CEO Bill Miller sent a letter to Garland saying the illegal offshore gambling industry is no longer just a nuisance but “becoming a serious threat to the legal, licensed gaming industry.”
Two months later, on June 29, 2022, a bipartisan group of 28 members of the U.S. House of Representatives — 15 Democrats and 13 Republicans — sent a similar letter to the attorney general.
On top of that, regulators in seven prominent gaming states weighed in earlier this month with their own letter to Garland urging him and the U.S. Department of Justice, which he leads, to take action against the offshore gambling menace.
Those crickets you may be hearing are louder than the non-response so far from Garland and the Justice Department to all three letters.
With President Joe Biden facing a difficult re-election campaign in 2024 and Garland virtually certain of losing his job if Biden is defeated, the Justice Department’s silence is even more of a head-scratcher politically.
After all, who would not support Biden or Garland if they announced a crusade against illegal gambling, even if they do not really do anything about it?
Meanwhile, the offshore gambling industry continues to thrive.
Annual illegal sports betting by Americans with bookmakers and offshore websites totals $63,8bn according to an AGA report released last November.
So the question is whether the licensed gambling industry is making any progress in a war that may never be completely won.
Thus far, the evidence is not encouraging.
Shortly after the U.S. Supreme Court authorized states to legalize sports betting in May 2018, New Jersey Division of Gaming Enforcement director David Rebuck, which is arguably the most influential gambling regulator in the nation, announced a zero tolerance policy for Bovada and other illegal offshore gambling operators.
“If I find out that you are actively engaged in doing illegal gambling in the United States, you’re barred,” Rebuck thundered during an interview in his Atlantic City office with VIXIO GamblingCompliance.
Yet just last month Rebuck acknowledged “the illegal market is still here in our state.”
Ronnie Jones, a former chairman of the Louisiana Gaming Control Board and a regulatory consultant for Entain, helped organize this month’s letter signed by Rebuck and leading gaming regulators in six other states.
“The power and authority of the several state regulators is woefully insufficient in pursuing legal action against offshore operators,” Jones told VIXIO in an email.
“In fact, I think it’s safe to say that shutting down those operators would be virtually impossible for a state regulator,” Jones said.
The reason why, Jones said, is the internet and its “technological labyrinth that is almost impossible to navigate.”
Shutting down offshore gambling websites, “can be a high-tech game of whack-a-mole, and odds are the regulator is going to lose,” he said.
That does not mean the gaming industry’s war against illegal offshore competitors is not worth fighting, according to Chris Cylke, the AGA’s senior vice president of government relations.
Cylke cited the letter sent earlier this month to the Justice Department by state regulators as “an important step in state and federal governments working together on this issue.”
“While federal authorities have more tools at their disposal, state gaming regulators have an essential role in making it harder for these illegal sites to do business,” Cylke said.
Jones agreed, saying a federal-state coalition against illegal offshore gambling is “all about sharing information and coordination.”
As for the federal Justice Department, it did not immediately respond on Friday (May 19) to a question about how much progress it has made so far in cracking down on illegal offshore gambling.