DOJ Addresses Regulators Concerning Offshore Gambling

In a recent statement, the US Department of Justice (DOJ) addressed concerns raised by a group of gaming regulators regarding the ongoing issue of illegal offshore gambling.

The DOJ emphasized its unwavering commitment to confronting the issues surrounding illegal gambling. They asserted, “We view illegal gambling, especially unlawful online practices, with utmost severity and remain proactive in both investigation and prosecution.”

Presently, legal online casino gaming is permitted in only six states, specifically:

• New Jersey
• Pennsylvania
• Delaware
• West Virginia
• Connecticut
• Michigan

Meanwhile, online sports betting has garnered legal status in approximately 30 states, along with Washington, DC.

Regulatory Authorities Urge Stricter Measures Against Illegal Gambling

Recent data from the American Gaming Association (AGA) suggests that a staggering $500 billion is funneled into illicit gambling operations via unregulated websites each year. This colossal diversion translates to states forgoing potential tax revenues estimated at around $13 billion annually.

Earlier this year, the Michigan Gaming Control Board’s (MGCB) Executive Director, Henry Williams, penned a letter to Attorney General Merrick Garland, voicing concerns over offshore operators. Williams emphasized:

“Michigan upholds stringent regulations concerning internet gaming and sports betting. These laws are designed to safeguard consumers, inspire public trust, and ascertain honest gaming practices. We stand ready to collaborate with the US Department of Justice, offering our full support as they tackle breaches of US laws by offshore illegal gaming entities that exploit American citizens.”

Highlighting the risks associated with illegal sports betting and unsanctioned online casinos, Williams listed several issues, including:

• Absence of age verification mechanisms to shield minors.
• Failure to invest in responsible gaming initiatives.
• Lack of protective measures against money laundering.
• No assurance of equitable payouts for players.
• Deprivation of state tax revenue which could have otherwise been allocated to crucial sectors such as education.

This ongoing dialogue between the DOJ and regulatory authorities underscores the urgency to address the challenge posed by offshore and illegal gambling enterprises.

Responding through DOJ’s intergovernmental liaison, Megan A. Bennett, the Department emphasized its commitment to tackling the problem. The statement highlights:

“The DOJ, along with its investigative arm, the Federal Bureau of Investigation (FBI), is actively investigating allegations of violations of federal gaming laws. Upon confirmation of any such violations, the FBI promptly channels these findings to the pertinent federal prosecuting authority, usually the US Attorney’s Office in the respective jurisdiction.”

Furthermore, the DOJ reinforced its stance on the issue, stating,

“The Department is resolute in its efforts to counter illegal gambling, including its online manifestations. With the FBI fostering robust collaborations across both public and private sectors, our collective goal remains clear – to mitigate the negative impacts of illegal gambling on individuals and communities. Rest assured, we are utilizing every resource at our disposal to detect, investigate, and take stringent action against such illegal operations.”

This correspondence between the DOJ and the regulators was made public by the Nevada Gaming Control Board. The initial letter to the DOJ bore signatures from gaming regulators spanning several states, including Colorado, Illinois, Louisiana, Michigan, Mississippi, and New Jersey.