The president and CEO of the American Gaming Association is urging the federal government to indict offshore betting operators.
“An indictment will make it very difficult for someone who lives in that gray market to ever get licensed,” AGA President and CEO Bill Miller told legislators at the National Council of Legislators of Gaming States in Las Vegas last Friday
Miller has been pressing the federal government to act on these unregulated offshore gambling sites since the start of 2022. These sites take in hundreds of billions of dollars in handle from US citizens.
“This action would provide much-needed clarity that these websites are criminal enterprises,” Miller wrote in a letter sent to the US Attorney General’s office earlier in 2022. “Which can help to deter the American public from visiting these sites and prompt businesses to take appropriate action to ensure they are not supporting them.”
Such a decision to pursue offshore betting operations could erase the only California sports betting option.
In November, a pair of proposals that would have legalized real-money sports betting failed at the ballot box by California voters. Until a sports betting initiative gets approved in an election, which may take many years, Californians will have no legal options for real-money wagering on sports for the foreseeable future.
AGA Lobbying to Remove Offshore Sportsbooks Before They Gain Legitimacy
The AGA, through Miller’s letter and comments to lawmakers in Las Vegas, is making a concerted effort to pressure the US Government to take action against offshore sportsbooks. There is concern that the longer offshore operators exist without criminal action being taken against them, the bigger the chance they could gain legal status through lobbying efforts of their own.
Miller and the AGA are hoping that US Attorney General Merrick Garland will respond to their appeals.
According to the AGA, their representatives have had discussions with the FBI. Miller says some members of the US Congress are open to the idea of pressing for indictments of offshore sports betting operators.
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Offshore sportsbooks operate outside the jurisdiction of the US by setting up websites on foreign servers and conducting transactions via banking institutions in foreign countries or through cryptocurrency exchanges. Consumers in the US who place bets with such groups are in danger of being defrauded and are not protected under US gaming law.
Since they are unregulated, offshore sportsbooks are not required to meet the stringent requirements set by state governments.
How Much Money Is Spent on Offshore Gambling?
An AGA commissioned study claims that $511 billion is spent by Americans annually with unregulated sportsbooks or offshore betting sites. As a result, the report claims, US states are missing out on $13.3 billion in annual tax revenue.
Since the US Supreme Court made a landmark decision striking down PASPA in 2018 that cleared the way for states to legalize sports betting, more than two dozen states have done so.
On Jan. 1, 2023, Ohio will join the list of US states with a regulated online sports betting market.
California, as the most populous state, and seventh-largest economy in the world, has an estimated millions of sports bettors who would like to wager on sports. Currently, they can only do so by traveling to nearby states that have legal sportsbooks, such as Nevada or Arizona, or using apps like Fliff, which offers free, legal sports betting with a chance to redeem game tokens for real cash prizes.
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Some may also be choosing to transact with offshore sportsbooks, but by doing so may be helping to fund other illegal activity.
In criticism of offshore betting sites, the AGA has previously pointed out that in some cases the operators are involved in other crimes, such as money laundering.
Thus far, no indictments have been issued for operators of the offshore websites that often brazenly entice consumers in the US, blurring the line between what is legal and what isn’t.
California Sports Bettors Already Use Offshore Sportsbooks
In August, California Casinos conducted a survey of current and potential California sports bettors about sports betting in California. The results revealed that some residents in California are already using offshore betting sites.
When asked to “list the sportsbook apps you currently use,” in our survey, 10.4% of respondents listed offshore operators Betcha (now known as Vivid Picks), Bovada, BetUS, Stake.com, BetOnline, MyBookie, 1xBet, FortuneJack, and Sportybet.
None of those operators has a license to accept wagers on sports in the US or California. Their existence only muddles a confusing landscape for sports bettors in the state, where nearly $500 million was spent by parties in favor and opposed to legal sports betting leading up to the November election.
An additional danger of offshore betting sites is the fact that they frequently offer higher betting limits than you’ll find from legal US sportsbooks. That means even if fewer bettors are customers of the unregulated operators, they could be funneling large sums of money offshore.
The California Casinos survey showed that many California voters are confused by the sports betting industry. Some respondents were unaware of the difference between regulated and unregulated options, or which brands actually have a sportsbook.
This means organizations in the state that support legal sports betting must educate the public on legal sports betting, rather than allow it to become a referendum on other issues such as homelessness and tribal rights. That is largely what happened in the failed 2022 election.