A bipartisan group from Congress has called upon the Department of Justice to increase scrutiny and prosecution of illegal offshore sportsbooks at the same time that regulated sports wagering operators continue to expand their reach across the U.S.
The group includes 28 representatives from 13 states, ranging from mature sports wagering markets in Nevada and New Jersey to those which will launch in 2023 (Ohio) and those that have yet to legalize, including California and Texas. Sports wagering, when including states that offer tribal gaming, is legal in 35 states and the District of Columbia.
The letter sent Wednesday to Attorney General Merrick Garland notes that the offshore sportsbooks “expose our constituents to financial and cyber vulnerabilities; do not have protocols to address money laundering, sports integrity, or age restrictions; and undermine states’ efforts to capture much needed tax revenue through legal sports betting channels.
Since PASPA was struck down by the U.S. Supreme Court in 2018, over $135 billion has been wagered legally nationwide, including more than $38.1 billion in the first five months of this year. Overall state tax revenues recently surpassed $1.5 billion, with nearly $530 million generated thus far in 2022. New York, which launched mobile operations in January, has accounted for more than half of this year’s total tax revenue and close to 20% of handle.
Key offshore books singled out
I sent a letter to @TheJusticeDept asking them to make a concerted effort to fight illegal offshore sports books which expose Americans to financial and cyber vulnerabilities. @GReschenthaler Read more here: https://t.co/j53vIGL7vm
— Dina Titus (@repdinatitus) June 29, 2022
Despite the expansion of legalized sports wagering, the congressional group has concerns that offshore betting remains a thriving market. It notes that “internet searches nationwide for offshore sportsbooks increased by almost 40 percent in 2021,” which also outpaced searches for legal ones. Bovada Sportsbook was singled out as the most popular offshore entity searched, while the letter referenced MyBookie and BetOnline as also having “developed sophisticated platforms that are nearly indistinguishable from that of legal providers.”
The increased access to such sites, with online wagering now the predominant method of placing bets, means offshore books are no longer relegated to the “dark web” and have the potential to sow confusion for bettors who may be unaware they are wagering illegally. The letter to Garland also points out how offshore books do not “offer the protections Americans have learned to expect from legal, regulated sportsbooks,” which includes responsible gaming functions, identify verification, and secure personal and financial information.
“Offshore sportsbooks do not adhere to federal or state financial regulations, so consumers can never be sure if their information is secure or if they will receive their winnings. These operators are not bound by age restrictions, meaning children and young adults can be exploited by these websites. Finally, these illegal operators do not help promote the integrity of sporting contests by sharing with sports leagues information related to unusual betting patterns or insider betting, as many regulated sportsbooks do.”
AGA backing and a call to action
The American Gaming Association, which made its own similar request to Garland in April, expressed its support for the congressional call. AGA President and CEO Bill Miller said in a statement this week, “Offshore gambling websites are a significant threat to consumer protections and the economic benefits legal gaming provides for communities across the country. Eradicating these websites, and all forms of illegal gambling, is one of AGA’s top priorities.
“After our initial outreach to the Department of Justice in April, today’s letter to Attorney General Garland demonstrates the broad interest in addressing illegal gaming. We are grateful to Gaming Caucus Co-Chairs Reps. (Dana) Titus and (Guy) Reschenthaler for their leadership and the Members who joined this call to action.”
The congressional group is looking for the DOJ to work with the gaming industry, sports leagues, and other stakeholders to “identify the worst actors, investigate, and prosecute them.” It has asked for a response from the Justice Department by Sept. 6 — two days before the start of the NFL season, when wagering will notably increase nationwide — that outlines “any additional tools from Congress that can facilitate federal law enforcement action and ensure prosecutorial support is dedicated to disrupting and dismantling these criminal organizations.”
