.svg)
Ongoing efforts to crack down on offshore gambling sites and unlicensed sweepstakes platforms operating in the U.S. continue to be challenged by a lack of acquiescence on the part of the companies, according to Maryland's chief regulator.
In Maryland, a recent effort to force a group of 11 offshore gambling sites and sweepstakes platforms to block access to state residents has stalled after the operators ignored cease-and-desist letters.
“It is clear that there are a number of operators who do function offshore and beyond our borders and (are) operating within Maryland and offering illegal casino-style games and sports (betting),” said John Martin, director of the Maryland Lottery and Gaming Control Agency (MLGCA).
“The problem,” Martin said, “is that the state does not benefit from any tax in the gaming revenue that’s generated by these illegal jurisdictions, illegal organizations”.
Martin expressed concern that unregulated sites continue to drive players away from legal operators towards illegal markets, with little consideration given to consumer protection measures such as responsible gambling.
In a briefing before the House Ways and Means Committee on Wednesday (January 15), Martin confirmed that the MLGCA had issued 11 cease-and-desist orders to unlicensed operators, with only six responding to the request but all of them continuing to accept customers in Maryland.
The six sweepstakes operators that responded to the letters were Stake.us, McLuck, Golden Hearts, Zula, Rebet, and Fortune Coins.
“They've responded with ways that they feel their businesses are, in fact, compliant and legal,” Martin said of the sweepstakes companies. “None, to date, have agreed to block access, which is what we had asked. So, we’ll continue to follow up.”
Cease-and-desist letters were also sent to offshore gambling sites BetUS, BetNow, SlotsandCasino Everygame Sportsbook and BetAnySports, but none of those companies have responded, according to the MLGCA.
Martin assured the House committee that officials have sent follow-up letters to all operators demanding they block access to Maryland residents and initial letters to payment processors who handle the transactions are also in progress.
He told lawmakers that officials will work with Maryland attorney general Anthony Brown, plus other states and gaming regulators on this issue. He told lawmakers that regulators might get some assistance on the federal level, but enforcement is “certainly something we’re gonna have to work through on a state-by-state basis”.
Currently, the MLGCA works with a network of about 12 to 15 states on a monthly basis to determine what is working within each other’s jurisdictions from a regulatory perspective.
Delegate Vanessa Atterbeary, a Democrat who chairs the Ways and Means Committee, asked Martin if he knew where these offshore companies were operating from.
Martin said the agency was aware of their locations but told Atterbeary that the issue was larger than merely the 11 companies targeted with cease-and-desist letters.
“There are dozens, if not hundreds of these entities,” Martin said. “So, by no means, no-one should be misled to think, boy, once we get these 11 nailed down, we're good to go.
“It's almost like, and I apologize for using the term, but the whack-a-mole concept is something that we use in the industry,” he added. “So, once you think you've got one secure another one pops up.”
Martin admitted that offshore companies have little incentive to respond to his agency or even comply with any order from a state attorney general.
He said he would not be surprised if each company simply put Maryland’s cease-and-desist letter in a folder with letters they received from other jurisdictions.
Republican Delegate April Miller was curious if any states had been successful in fining or blocking these sites.
“We all kind of hold up Michigan as an example,” Martin said. “They are taking a very, very stern, no-nonsense approach to it. We're seeing some progress … but again, they're illegal gaming sites for a reason. So, they're never going to throw in the towel and say, ‘Oh, you got us. We're done’. So, it's, it's an ongoing effort.”
Late in 2023, the Michigan Gaming Control Board (MGCB) sent cease-and-desist letters to major sweepstakes platforms VGW, Stake and PredictionStrike accusing the operators of offering illegal online gambling.
As a result of the letters, all three operators exited the Michigan market.
The MGCB has since followed up with further letters to other unlicensed or illegal operators, kicking off a trend among regulators of taking action against arguably the most prominent offshore sportsbook brand in the U.S., Bovada.
So far, access to Bovada has been restricted to residents in 17 U.S. states plus the District of Columbia.
Regulators in other states are seeking to continue the crackdown, with the chief gaming regulator in Louisiana testifying before lawmakers last month that his agency was preparing to issue up to 50 cease-and-desist orders in the near future.
In Maryland's neighbor Virginia, gaming regulators are also deliberating over whether to take action against offshore sportsbooks and casino sites that are taking bets from state residents.
“There is a big problem with that. There are hundreds of offshore entities involved with betting,” Orrin Gallop, a board member and member of the gaming compliance committee for the Virginia Lottery Board, told colleagues at the board's meeting on Tuesday (January 14).
Gallop told fellow board members that most of what is being done by other states was issuing cease-and-desist letters to offshore operators, with Bovada being the most targeted site by regulators.
“We will have a discussion with the attorney general regarding that,” Gallop said.
