In the sports betting industry, having an exclusive market is critical to success. When outside entities such as offshore gaming enter the picture, it can cut into the bottom line of regulated sites. With that in mind, seven states have signed on to a letter to the U. S. Department of Justice and Attorney General Merrick Garland that requests immediate action from the nation’s legal arm.
Billions Lost in Offshore Gaming
Kirk Hendrick, the chairman of the Nevada Gaming Control Board, authored a letter to the legal eagles at the DoJ that stated the position of the Silver State. In that letter, Hendrick is reported by the Las Vegas Review-Journal’s Richard Velotta as stating, “We write today to urge the Department of Justice to prioritize combatting illegal, offshore sportsbooks and online casinos.”
In the letter, Hendrick points out some of the issues that the regulated Nevada online poker industry is facing. The loss of tax revenues, the lack of age verification requirements, the inability to “follow the money” that is in play (money laundering), and several other areas are brought to the attention of the DoJ. “We strongly encourage the Department of Justice to prioritize the investigation and prosecution of these offshore sites and stand ready to provide any assistance that we can as state gaming regulators,” Hendrick concludes.
The letter has been signed off on by the other states that have potentially a much higher stake in the game. David Rebuck, the director of the New Jersey Division of Gaming Enforcement; Henry Williams, the executive director of the Michigan Gaming Control Board; Dan Hartman, director of the Colorado Division of Gaming; Ronnie Johns, the executive director of the Louisiana Gaming Control Board; Marcus Fruchter, administrator of the Illinois Gaming Board; and Jay McDaniel, the executive director of the Mississippi Gaming Commission, all signed off on the letter that Hendrick penned. The reason these other states might have more in the game? They all have online casino gaming, which offers more lost opportunities in the revenue arena than the strictly “online poker only” offerings of the state of Nevada.
What Could Happen? Probably Nothing…
While the seven states petitioning the DoJ for action have legitimate concerns about offshore gaming, it is highly unlikely that the federal government is going to get involved in the issue.
First, it takes years to build cases against an international operation. It took years of investigation before the “Black Friday” shutdown of the online poker world in the States of America took place and, even after that, it only shut down three major players. It didn’t even slow down other outlets that operated just beyond the reach of the “long arm” of U. S. law enforcement.
Second, catching these online operations is extremely difficult. Online operations can be shut down and brought up seemingly at a whim, making it tough for law enforcement to build a case against them. Just as they are prepared to close down on said operators, they disappear and return when the coast is clear.
Finally, the federal government has turned over online gaming to the states. As such, it is up to those state regulators to pursue the issue, since the DoJ doesn’t have the tools (regulations) in place to do such work nor does it have the jurisdiction – there are no “federal gaming regulations” to enforce. Each of these states has regulations that prohibit offshore sites from entering the market; a few offshore companies have abided by these regulations, but more unscrupulous operators simply thumb their noses at the state regulators.
While there are excellent reasons for the states to attempt to involve the Department of Justice in the pursuit of illegal operations, it may be up to them to do something about it.
