Federal prosecutors are being urged by American casinos, gaming businesses, and lawmakers to crack down on offshore gambling sites that they claim are breaking consumer protection laws.
The initiative coincides with the rapid growth of legalized sports betting in the United States in recent years, with more than 30 states and Washington, D.C., supporting it.
According to Bill Miller, CEO of the American Gaming Association, “What may have once been a relative annoyance, is now becoming a serious threat to the legal, licensed gaming industry.”
The AGA requested the Justice Department to look into well-known offshore gambling sites in a letter to Attorney General Merrick Garland this spring, alleging that they are flagrantly breaking both federal and state laws and brazenly funding advertising that targets gamblers in the United States.
The Justice Department was then urged to look into and pursue criminal charges against illegal offshore sportsbooks in a letter that was sent on June 29 by more than two dozen other members of Congress.
The AGA’s letter and CNBC’s request for comment have not yet received a response from the Justice Department.
As online searches for offshore sportsbooks increased more quickly than searches for regulated operators last year, the challenge facing the gaming industry has grown. According to an association survey, more than half of gamblers still claim to bet on foreign websites like Bovada, MyBookie, and BetOnline.
“Every single day, hundreds of unlicensed or illegal operators accept bets on sports. We estimate that some of these offshore operators are channeling as much as $15 billion “Amy Howe, CEO of FanDuel, told CNBC.
In order to get sports betting legalized in new states, legal operators like FanDuel, owned by Flutter, DraftKings, Caesars, and BetMGM, co-owned by MGM Resorts and Entain, spend billions of dollars on licensing, marketing, and lobbying.
According to the businesses, offshore competitors compete for clients without spending money on licensing, lobbying, or state and local taxes.
“They gain an unfair competitive advantage as a result. They can provide the consumer with better odds, “Added Howe. Many players, she continued, are unaware that they are using unauthorized betting sites.
Before the Supreme Court struck down the Professional and Amateur Sports Protection Act in 2018 and allowed states to legalize sports betting, some gamblers used offshore bookmakers for years.
According to professional gambler Justin Werlander, a lot of high rollers use offshore gambling sites because they support credit cards and allow larger transactions.
Justin Werlander courtesy
Justin Wunderler, a gambler from New Jersey, claimed that beginning in high school, when that was the only option available for sports wagering, he used to wager on sports through offshore websites. He has since experienced numerous failures when attempting to withdraw money from offshore bookmakers.
He said, “I kind of got screwed. “They took my winnings and fled, that’s all. When you win, bookmakers occasionally fail to pay out.”
Howe claimed that unregulated websites frequently disregarded the measures put in place by American operators to promote responsible gambling and protect their licenses. According to her, 25% of the people who switch to FanDuel from illegal operators do so because they weren’t paid for their winnings.
However, some seasoned gamblers continue to use unregulated sites because they offer better odds, more lucrative promotions, or allow high rollers to make credit bets. Additionally, some regular gamblers might find that the legal sportsbooks in the United States have capped their bet sizes.
The “sharks,” or seasoned, shrewd gamblers, the offshore sites, according to Wunderler, are given access to much higher limits. While some of these legal sites only allow wagers of $120, he claimed that some of them could reach $50,000.
Online searches for offshore betting sites have decreased in states that have legalized sports betting, claims the gaming association. However, according to the AGA, half of all nationwide searches for sports betting are still directed to the offshore website Bovada.
According to Miller of the AGA, the gaming industry is seeking a partnership with Google and other search engines to prevent illegal websites from showing up in search results.
The casino sector is also urging law enforcement to crack down on illegal slot machines, which are frequently found in bars, convenience stores, and gas stations.
American Gaming Association, with permission
The casino sector is also urging law enforcement to crack down on illegal slot machines, which are frequently found in bars, convenience stores, and gas stations. To get around gambling laws, the manufacturers have rebranded these games as “skills-based” games even though they look, sound, and operate like slot machines.
“They are not tested, which is why it matters. There is no quality control for odds, “Miller said. Additionally, he claimed that the host location infrequently takes responsibility if the machines don’t pay out.
The well-known Buffalo slot machine is one of many produced by Aristocrat that are authorized in 300 U.S. jurisdictions. Hector Fernandez, the company’s CEO, claimed that unlicensed manufacturers had stolen the designs and other intellectual property from the business.
Fernandez expressed concern over the lack of consumer protections in unregulated gaming.
Although it claims that it can be challenging to distinguish between legal and illegal operators, the industry is working to educate players about unregulated operators.
We all have a responsibility to inform the public, who frequently aren’t aware of whether they’re betting on legal or illegal websites, Miller said.