MGCB Joins Six States In Urging DOJ To Address Offshore And Illegal Gambling

The Michigan Gaming Control Board continues to make combating illegal gambling a priority in the state.

Last week, the MGCB joined a coalition of seven gaming states’ regulators in urging the U.S. Department of Justice to make combating illegal, offshore sportsbooks and online casinos a priority.

A letter was sent on April 28 to Attorney General Merrick Garland to address the threats of offshore gambling that state regulators are unable to tackle alone.

The American Gaming Association estimates that $511 billion is illegally gambled each year in the United States.

Michigan online casinos continue to rise, and Michigan online sportsbooks are holding steady. Negating illegal markets would only strengthen the state’s regulated online industry.

States urge DOJ to aid in stopping illegal gambling

Michigan was joined in the letter by Colorado, Illinois, Louisiana, Mississippi, New Jersey and Nevada.

“In Michigan, strict laws and rules govern internet gaming and sports betting and provide consumer protections, promote confidence and ensure fair and honest gaming,” MGCB Executive Director Henry Williams said in a press release. “We are willing to help the U.S. Department of Justice in any way we can as it pursues enforcement of U.S. laws against offshore illegal gaming enterprises that take advantage of our citizens.”

In the letter, the regulators noted the dangers that illegal offshore wagering site pose. That includes:

• No age verification requirements to protect minors
• Lack of investment in responsible gaming programs
• No controls to prevent money laundering
• No guarantees of fair payouts for customers
• Loss of state tax revenue that funds important initiatives like education

Offshore operators don’t adhere to the same requirements that state-regulated operators do. That also keeps the MGCB from being able to legally settle any disputes between a consumer in Michigan that has issues with an offshore operator.

The Department of Justice can address these critical issues through leadership in enforcement action against offshore operators.

“State regulators like the MGCB ensure operators offer products that pass technical standards and testing, and we also require operators to comply with reporting requirements,” Williams said. “Offshore operators flaunt state regulations and offer products that do not protect the public, which greatly concerns me and my fellow state regulators.”

Illegal gambling costing $13.3 billion in lost tax revenue

With $511 billion being illegally gambled each year in the country, that leads to $13.3 billion in lost tax revenue.

Legal operators generated $11.7 billion in tax revenue in 2021.

“Illegal and unregulated gambling is a scourge on our society, taking advantage of vulnerable consumers, skirting regulatory obligations and robbing communities of critical tax revenue for infrastructure, education and more,” said AGA President and CEO Bill Miller in a press release. “We have always known that the illegal and unregulated market is expansive, but this report illuminates just how pervasive it is.”

Here’s a look at how the U.S. illegal and unregulated market breaks down.

Unregulated machines, also referred to as “skill machines” have been a particular focus here in Michigan. The most recent was a raid in Delta Township. That raid saw 36 machines and $23,000 in cash seized.