The issue of illegal sports betting and iGaming is on the radar of lawmakers in Washington, as well as the FBI.
The head of a major gambling industry group said Friday that he is hoping charges will be laid against operators of illegal sportsbooks and casinos shortly, a move that would send a severe message to entities still taking bets in the “gray” and “black” markets.
The Washington, D.C.-based American Gaming Association (AGA), whose members include the operators of brick-and-mortar casinos and online sports betting sites, has been continuously pushing lawmakers to crack down on illegal and unregulated wagering activities.
AGA President and CEO Bill Miller said during his remarks to the National Council of Legislators of Gaming States on Friday that their goal in the coming months is to obtain indictments.
Miller told the council that he believes some illegal operators want to become so “annoying” that lawmakers will eventually legalize their activities as they have with other parts of the industry.
“I think that’s dead wrong,” Miller noted to the legislators, who are gathered in Las Vegas this week for their winter meeting. “And an indictment will make it very difficult for someone who lives in that gray market to ever get licensed.”
Miller’s comments came a day after an AGA official told a meeting of the Sports Betting Regulators Association that they have had conversations with the Federal Bureau of Investigation following a letter the AGA's CEO sent to U.S. Attorney General Merrick Garland earlier in the year.
The letter likewise targeted "pervasive illegal gambling" in the country and said the Department of Justice can make a "meaningful statement" by investigating and indicting the biggest offshore operators that violate federal and state law.
“This action would provide much-needed clarity that these websites are criminal enterprises, 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,” Miller wrote.
Miller told the gaming-state legislators that members of Congress have been very responsive and helpful in asking for more federal enforcement of illegal gambling since sending his letter to Garland. And, since the letter was sent, the AGA has spent time putting together research to support its arguments about the pervasiveness of illegal gambling.
Notably, a recent report by the AGA projected Americans were gambling $511 billion every year with illegal and unregulated sportsbooks, iGaming websites, and purported "skill games."
That wagering is costing state governments an estimated $13.3 billion in annual tax revenue, which was about $2.5 billion more than what legal operators forked over in 2021, the AGA said. It also shortchanged the legal sports betting and broader gaming industry by around $44.2 billion in annual revenue, or about half of 2021's haul for regulated operators, the report found.
A member of the FBI told the sports-betting regulators that they weren't in a position to comment on any ongoing investigations but that the problem is on their radar. An investigation into offshore entities, though, can be challenging, especially since those entities reside outside the United States.
But Miller stressed to his audience in Vegas that people who shortcut the legal gambling system or “actually flaunt the rules of law” should not ever be put in the same standing as those who do abide by the regulations.
“So we're going to continue to work on it,” the AGA CEO added. “It is not a fight that’s going to be overnight.”