Coalition Highlights Lack of Consumer Safeguards, Responsible Gaming Measures

By John Isaac,
Editor at online-gambling.com

John Isaac Editor at online-gambling.com

John Isaac is an editor with many years of experience in the gambling industry. He writes expert articles on card games like blackjack and poker. In addition, he is also well aware of the US gambling laws and the Indian and Dutch gambling markets. You can rely on verified information and insightful details.

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Last updated: May 20, 2023

The Department of Justice (DOJ) has been urged by a coalition of seven US states to take action against unlawful offshore gambling sites that accept US players. The gambling regulatory bodies of Colorado, Illinois, Louisiana, Mississippi, New Jersey, Nevada, and Michigan are part of the consortium.

They claim that there are no consumer safeguards offered by offshore gambling platforms, that no initiatives are funded to promote responsible gaming, and that there are no measures in place to stop money laundering. To further verify that users are of legal gaming age, they do not employ age verification techniques. In a letter to US Attorney General Merrick Garland, the group asked him to give the DOJ top priority in the battle against unlicensed offshore sportsbook and casino websites.

In a statement, the Michigan Gaming Control Board (MGCB) joined the alliance. According to Henry Williams, executive director of the MGCB, Michigan has rigorous laws and regulations governing online gaming and sports betting that protect consumers, foster trust, and ensure fair and honest gaming. The state is eager to work with the DOJ to enforce US laws against foreign gambling companies that exploit its residents.

Given that offshore websites don’t work from the US but rather from iGaming-friendly nations like Malta, the Philippines, and the Isle of Man, the coalition and the American Gaming Association (AGA) are advocating for improved enforcement of online gambling regulations. As a result, state gaming operators and the law enforcement organizations that support them have few options for taking action against unregulated gambling operations. Since offshore websites are not subject to background and suitability checks by state gaming authorities, it is frequently a mystery about who stands behind the iGaming platforms. Offshore websites have the potential to vanish and go offline with their players’ money.

Offshore Gambling Generates $500 Billion Yearly, Potential Tax Loss of $13 Billion

Over $500 billion in gross income is reportedly generated yearly by illegal and unregulated offshore gambling websites, according to the AGA. If that figure is close to being true, the tax benefit loss might be as high as $13 billion. According to AGA President and CEO Bill Miller in a statement, illegal gambling is a plague on society that exploits vulnerable people, avoids regulatory requirements, and robs communities of vital tax income for infrastructure, education, and other purposes.

Prior to 2011, when it seized the internet assets of Full Tilt Poker, PokerStars, and Ultimate Bet, the DOJ had targeted unlicensed online gambling sites. The websites were taken down after it was determined that they were breaking the Unlawful Internet Gambling Act of 2006. In a letter to Garland in April 2022, the AGA argued that even if indictments and convictions may be challenging to obtain, the DOJ might send a powerful and significant message by looking into and bringing charges against the biggest offshore businesses that flagrantly flout federal and state laws.

DOJ Urged to Shut Down Illicit Offshore Sites Serving Us Players

The group of seven states is pressing the DOJ to focus its efforts on shutting down illicit offshore gambling sites that serve US gamers. The coalition claims that offshore gaming companies offer no consumer safeguards, make no investments in initiatives to promote responsible gambling, and lack any measures to stop money laundering. They contend that in order to confirm that a player is of legal gaming age, such websites frequently do not apply the proper age verification techniques. If the AGA’s estimate of the yearly total income generated by unlicensed and unregulated offshore gambling websites is roughly accurate, the tax benefit loss might be as high as $13 billion.