Department Of Justice Urged To Shut Down Threat Of Illegal Gambling Sites

The American Gaming Association has recently urged the United States Justice Department to take stronger legal actions against illegal gaming operations operating within the country.

The Attorney General’s Office (AGA) conveyed their concerns to Attorney General Merrick Garland in a three-page letter, highlighting the alarming and organized nature of online platforms and other entities. These entities pose an increased risk to American consumers availing their services.

References were made to offshore sites like MyBookie, BetOnline, and Bovada, as well as warnings about manufacturers of “skill-based” machines.

AGA President and CEO Bill Miller penned a letter emphasizing the importance for the Department to prioritize taking action in order to safeguard American consumers, clamp down on illegal operators, and ensure the enforcement of federal regulations.

AGA says it wants to protect its members, consumers

According to Chris Cylke, AGA’s senior vice president of government relations, the topics of responsible gaming and compliance have a unifying effect on its members. This is quite challenging in a fiercely competitive industry where consensus is not always reached on every matter.

Across the gaming industry, there are approximately 80 members of the AGA. These members consist of a wide range of entities, including large casino gaming operators, native online gaming platforms, sports betting sites, slot-machine manufacturers, and many others.

Throughout the year, the association convenes to determine the most suitable endeavors to prioritize in order to effectively advocate for the industry’s interests.

According to Cylke, the justice department letter was not motivated by a single event but rather reflects their continuous dedication to transitioning into completely legal marketplaces.

Cylke stated that in his opinion, the purpose of this letter was to specifically address high-ranking officials at the DOJ and emphasize the necessity of taking decisive action through their enforcement authority to combat the illicit gambling industry more vigorously.

Offshore sites: Legal or not legal or what?

It can be challenging to explain the legal status of offshore operators to the general public. For instance, let’s consider Bovada, one of the companies mentioned in the AGA communication. Bovada manages its own Twitter account where they promote bonus offers and share sports jokes, just like any other regulated platform.

When you perform a Google search regarding the legality of Bovada, the general response indicates that it is permissible in the majority of states. This is supported by Bovada’s terms of service, which include a link revealing their licensing by the Government of Curaçao since 1996. Therefore, one could conclude that Bovada is indeed legal.

Cylke stated that these entities are considered illegal due to their lack of operating licenses in any state across the country. Additionally, they are found to be in violation of multiple federal laws.

According to Cylke, enforcement becomes challenging unless any of the site’s officers set foot on U.S. soil due to their operation outside the boundaries of the country’s law.

Cylke stated that our letter to the DOJ aimed to convey the importance of any form of official government action, such as an indictment or other measures, even if it falls short of a conviction. The objective is to clearly label these individuals as wrongdoers who have violated the law, thus fostering public awareness and understanding.

Why would someone use an illegal site anyway?

During a conversation with Playinmichigan, an individual who has participated in both legal and illegal gambling activities shared their experiences. These activities encompassed managing their own offshore gambling website and accepting bets as a bookie. For the purpose of anonymity, we will refer to this individual as “Paul.”

Inquiring about people’s motivations for gambling with their money on an offshore site, we posed the question to Paul. He responded via text messages, offering a range of reasons.

• Legal sites accept credit and/or debit cards, which means that a significant other can easily track the amount of money being wagered.
• Taxes are imposed on the winnings obtained from a lawful website.
• While legal sportsbooks require upfront deposits, a local bookie may extend credit to individuals, allowing them to wager without immediate payment.

The case for regulated gaming

According to Cylke, when inquired about how the AGA might address those concerns, he mentioned that it would be impossible for them to cater to everyone.

Cylke commented that those people who purchase illegal cigarettes from a truck on the road are probably the same individuals.

Cylke emphasized that although the AGA’s position may seem focused on competition, their main objective is to safeguard American consumers and maintain a regulated and equitable gaming industry in the United States. This applies not only to online activities but also extends to unregulated skill machines and similar products.

Imagine a vintage-style slot machine tucked away at the rear of an aged tavern or a comparable establishment. Cylke vividly portrayed scenes within 7-11 gas stations in Virginia, where these machines are scattered abundantly. One can frequently spot individuals who appear to have been engrossed in their play for countless hours.

Cylke stated that it is a significant difference from our heavily-regulated setting, where individuals are trained to identify signs of problem gambling and take action when someone’s finances are at risk.

According to him, numerous states possess thousands of these machines, but he acknowledged Michigan’s commendable efforts in tackling them.

Cylke acknowledged the efforts of Michigan’s regulator in prioritizing the crackdown on unregulated gambling machines.

Michigan cracking down on illegal operations

The Michigan Gaming Control Board joined forces with Lansing police and the attorney general’s office in March to conduct raids on two suspected storefront casinos in the city. As a result of these operations, over $91,000 and more than 80 machines were confiscated.

According to Mary Kay Bean, a spokesperson for MGCB, the Lansing locations were among three sites targeted in recent raids following the state’s authorization of internet gaming and sports betting in January 2021.

In an email to Playinmichigan, Bean stated that the MGCB collaborates with the Michigan Department of Attorney General in conducting investigations. Furthermore, the department takes the responsibility of pursuing warrants, pressing charges, and prosecuting individuals involved in alleged illegal gambling cases.

The gaming board extends its proficiency in gaming to support law enforcement in addressing the issue of illegal gaming, which is perceived as a menace to Michigan consumers.

Bean stated that the MGCB is well-informed about illicit offshore operations and holds the belief that the lawful and regulated market in Michigan serves as a deterrent to unauthorized operators. Similar to the AGA, the MGCB regards illegal gambling as a significant concern for the United States.

Bean stated that the MGCB actively promotes the public to provide tips regarding any suspected illegal gambling activities. The agency accepts anonymous tips through its website or via phone at (888)-314-2682. However, it is important to note that information sent directly to [email protected] is not considered anonymous.

Legal gaming benefits states in different ways

According to Cylke, it’s not just players who benefit from legal gaming operations; these operations also divert funds from regulated markets, adversely affecting programs that rely on such financial support.

Since the legalization of online gambling in January 2021, Michigan has successfully accumulated hundreds of millions in tax revenue. State and local governments have greatly benefited from the tax dollars generated by online casinos, surpassing $360 million.

State, local, and tribal governments have collected over $19 million in taxes from sports betting.

The purpose of tax revenue is to finance a range of public services, such as education and economic development. Detroit Mayor Mike Duggan has already acknowledged the contribution of online gaming in offsetting the city’s pandemic-related losses.

Cylke emphasized that the tax dollars also contribute to funding programs in different states, benefiting veterans and addressing homelessness.

Regulated markets provide safeguards for bettors

According to Cylke, legal and regulated markets offer thorough safety measures that are well-researched, specifically tailored to address addiction issues. These are the reasons highlighted by the AGA to emphasize the substantial threat illegal gaming poses to consumers.

Betting operators under regulation offer several measures to protect bettors. Through their applications, customers have the option to set their own limits on time and money spent. Additionally, authorized operators respect self-exclusion programs and offer resources to aid in addressing gambling addiction.

The increased availability of online gambling in Michigan has resulted in a rise in calls to the problem gambling hotline for various reasons. However, seeking assistance has become more convenient since the addictive behavior is now a legally sanctioned activity.

Legal operators play a crucial role in safeguarding the fairness of games. To illustrate, consider the situation involving Calvin Ridley, a receiver for the Atlanta Falcons. Ridley placed a bet on a Falcons game using a lawful application in Florida. The app’s operator promptly identified and flagged the wager. Such detection and intervention would not have occurred if Ridley had used an illicit or offshore account.

Cylke stated that the threat posed by illegal channels extends beyond just the economic aspect, as it also poses a risk to consumer protection by allowing them to openly operate.