When the Supreme Court reversed the ban on commercial sports betting in 2018, many figured that the days of illegal gambling were far behind us. However, fast forward four years and it becomes clear–illegal gambling (unregulated sportsbooks and casinos alike) is still very much an issue.
The American Gaming Association (AGA) recently called upon the US Department of Justice (DOJ) to help crackdown on illegally operated and unregulated sportsbooks and casinos throughout the country.
On Apr. 13, 2022, the AGA made its intentions clear with a letter addressed to the Attorney General, Mark Garland, expressing all of their concerns:
“On behalf of the American Gaming Association (AGA), I write to respectfully request the Department’s focused support in addressing pervasive illegal gambling taking place across our great nation. While the challenge of illegal gambling is not new, the brazen and coordinated manner in which it occurs – both online and in communities – has elevated this problem to a level that requires significant federal attention.”
While on the outside looking in it may not seem like illegal gambling in the US is much of an issue. The AGA’s research outlined in their letter tells a different story:
“74 percent of sports betters say it is important to only bet with legal providers, however, 52 percent continue to utilize illegal bookmakers. Most of these consumers (63%) later say they are surprised to learn that they are betting through unregulated and illegal sportsbooks.”
This is alarming not only because of the number of people using illegal sportsbooks. But, because a majority of gamblers (63%) are surprised to find out that the sportsbook they’re using is, in fact, illegal.
But what IS an illegal sportsbook/casino? Let’s take a look.
Offshore betting and other illegal gambling
In 1992, US Congress was on a mission to stop the spread of sports gambling. And later enacted the Professional and Amateur Sports Protection Act (PASPA). While this was done as an attempt to stop the expansion of sports betting, it, unfortunately, did the opposite.
The creation of PASPA just forced these gamblers to find new ways to bet. And these offshore “black market” sportsbooks were happy and willing to accept US bettors. Most of these illegal sportsbooks are operated out of the Caribbean, hence the name “offshore.”
These books are unregulated and unlicensed–so it’s kind of like the wild west of sports betting and casino gaming. Nothing is stopping them from withholding payouts, setting insane odds, or ensuring the fairness of their games. However, people still use them–according to the AGA, they bring in $150 billion annually.
These illegal sites don’t have to promote responsible gambling, or pay state or federal tax. Yet, they are readily available to any US resident with a smartphone or computer.
The effect of illegal offshore gambling
The AGA is very concerned about the possible future societal effects of these unregulated sportsbooks and online casinos.
“In addition to violating the law,” AGA President William Miller writes:
“The games offered by these sites do not meet testing or regulatory standards to ensure fair play and payouts, age-verification, or security of personal and financial data. Jurisdictions with authorized gaming implement rigorous responsible gaming protections and widely offer self-exclusion lists to assist users who may have difficulty controlling their play – but clearly, the illicit platforms do not implement such lists and as a result, the most vulnerable users are likely to end up using these options.”
The letter goes on to say that these illegal books often “simply disappear”. Vanishing without a trace, and with all their customers’ funds.
Unregulated “skill game” machines
The AGA’s letter also focused on the rise of unregulated gambling machines across the country. These “skill game” machines are no more skill than they are pure luck. But advertising as a “skill game” gets them out of the rigorous testing licensed slot machines have to go through.
In Kentucky, they are also known as gray games and have been a topic of contention for some time.
These “skill-based” games function very similarly to slot machines–so much so that it’s hard to tell the two apart. However, the “skill-based” games are unregulated, so operators can rig them as they want.
The AGA also called upon the Department of Justice to snuff out these machine. As they are a huge risk to casino game players across the country. The AGA claims in their letter that “These machines are also often tied to criminal activity, including money laundering, drug trafficking, violent crime and more.”
The AGA’s three points of focus
The purpose of this letter was to ask the DOJ for help to quash these illegal gambling operators and machines. The AGA’s asks can be broken down more simply into three points:
- The thorough investigation of the larger offshore betting operations that openly violate federal law
- Continued consumer education, mostly regarding the differences between illegal and legal gambling operators. As well as the dangers that come with the illegal sites.
- Making sure that these “skill-based” machines still reach the federal gaming standard.
It’ll be interesting to see how the DOJ plans to go about this. Or even if they plan to do so at all. One thing is for sure – these illegal gambling operators are a danger to consumers. And they spread nothing but bad gambling practices.
“Illegal operators have been put on notice: their days as a scourge on our nation are numbered,” added Miller. “These bad actors prey on vulnerable customers, offer no consumer protections, do not ensure integrity or fair play, and generate no economic benefit for states or tribal nations.”
