AGA Urges Department of Justice to curtail illegal online gambling

Haley Hintze Author Photo
Haley Hintze
Posted on: April 19, 2022 14:17 PDT

The American Gaming Association, the United States' largest lobbying group representing the casino-entertainment, has written to the Department of Justice (DOJ) and multiple members of Congress, urging that "illegal" offshore online gambling sites be cracked down upon by federal authorities.

The AGA, in a letter authored by its President and CEO Bill Miller, also asked the DOJ to investigate illegal "skill games" that have proliferated across the U.S., a reference to the millions of video-slot games and related devices that can be found in many bars, restaurants, private clubs, and other businesses in numerous U.S. states.

“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,” wrote Miller. “We urge the Department to make it a priority to act…to protect American consumers, crack down on illegal operators, and enforce federal regulations.”

Online sports betting primary focus of AGA's complaint

Online sports betting receives significant attention throughout Miller's letter to the DOJ and Congress. Miller even cites three brands -- Bovada, MyBookie, and BetOnline -- that operate "operate with a high degree of visibility and are readily accessible to every American with a smart phone or Internet connection."

Miller also claims the offshore sites "enjoy many competitive advantages that allow them to offer better
odds and promotions and ignore any commitment to responsible gaming because they do not pay state
and federal taxes or have comparable regulatory compliance costs and obligations." The AGA's claims belie the fact that the U.S. government had over a decade of opportunity to honor international World Trade Organization (WTO) commitments it made with other countries -- most notably Antigua -- covering all forms of online gambling. Had the U.S. honored the agreements it signed, it could easily have pressed offshore operators in Antigua and elsewhere into providing such regulatory compliance.

Currently, the AGA notes, sports wagering is authorized in 33 states and the District of Columbia, with more than 157 million American adults having access to state-regulated channels available to bet on sports.

AGA blames PASPA for illicit sports-betting market

In trying to finely parse its argument that the DOJ should find a way to intervene, the AGA acknowledges that despite decades of various hurdles, Americans still want to bet on sports and gamble in other ways. The organization then declares that the underlying failure is the Professional and Amateur Sports Protection Act (PASPA), which Congress passed in 1992, and which was declared unconstitutional in 2018, following legal challenges by New Jersey.

"Rather than preventing sports betting in the U.S., PASPA instead enabled a massive illegal sports betting market that the AGA previously estimated to be in excess of $150 billion dollars annually," the AGA missive asserts. "This near-monopoly for illegal operators fueled other criminal activity, provided no consumer protections or transparency to ensure the integrity of sporting contests, and generated no economic benefit for states or tribal nations."

Bovada, which like its predecessor, Bodog, offers multiple online-gambling verticals (including online poker), drew more ire from the AGA then any other offshore firm. At one point, as claimed by the AGA, "searches for offshore brands represented a majority of all sportsbook searches. Bovada alone accounts for 50 percent of all searches." Bovada/Bodog and its founder, Calvin Ayre, have been perceived as a thorn in the side of U.S. authorities for more than a quarter century, and Ayre so infuriated the DOJ that for several years he was granted a spot on its "Top Ten Most Wanted" list.

Yet the DOJ's task in taking down perceived "illegal" offshore sites may be more daunting than ever. In most U.S. states, gambling on offshore sites is not specifically illegal from the customer's perspective. Further, most online operators learned the lessons as taught by U.S. authorities, beginning with the takedown of the massive BetOnSports operation in 2006, the crackdowns on online payment services FirePay, NETeller, and Intabill, and finally, the 2011 "Black Friday" takedown that shuttered several major U.S.-facing online poker sites. To a significant degree, all of those sites were well integrated into the U.S.'s online banking system, which was, effectively, also their Achilles heel. Since then, to a large degree, international operators have limited their exposure to the reach of U.S. banking laws such as 2006's UIGEA (Unlawful Internet Gambling Enforcement Act), making possible DOJ intervention a more complicated task.

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