At least eight states have formally asked the federal government to prosecute illegal offshore gambling operations that are siphoning billions of dollars off the legal US market each year.
Massachusetts on Tuesday became the latest state to join the fray, as the Massachusetts Gaming Commission signed off on a letter asking the Department of Justice to “prioritize investigation of these offshore sites.”
The letter adds the Bay State to a list of seven states – Colorado, Illinois, Louisiana, Michigan, Mississippi, Nevada, and New Jersey – that sent a letter to the DOJ on April 28 asking the agency to “prioritize combating” illegal offshore sports betting and casino sites.
According to an American Gaming Association report last year, around $511 billion is gambled by Americans each year with illegal and unregulated sportsbooks, online casinos, and other games. The illegal activity “robs state governments of $13.3 billion in tax revenue annually – nearly $2.5 billion more than legal operators generated in 2021,” per the report.
“We echo the offer to be of assistance as you consider the impact of these bad actors,” states the letter to US Attorney General Merrick Garland signed by all five MGC commissioners Tuesday.
States Concerned with Offshore Effect on Legal Gambling, Human Trafficking
The original letter sent to Garland on April 28 made the case for federal involvement to protect consumers, gaming integrity, state revenue, and more. It also addresses a dark side – human trafficking and the illegal drug trade, which the states said could be funded by “the immense amount of money generated by these bad actors.”
States said in the letter that they “understand and appreciate the fact that the (DOJ’s) jurisdictional responsibilities are broad and, consequently, priorities vary over time. However, the many significant threats posed by illegal offshore gambling cannot be addressed by states alone and, therefore, require heightened federal attention and engagement.
“We strongly encourage the Department of Justice to prioritize investigation and prosecution of these offshore sites, and stand ready to provide any assistance that we can as state gaming regulators,” the letter states.
According to MGC Chair Cathy Judd-Stein, the federal government has not indicated what action, if any, it has taken against illegal offshore operations so far.
“I imagine there are efforts underway, but they might not be able to reveal them to us,” she said today.
Protection of Young Adults, Minors a Key Issue
Judd-Stein today cited a recent NCAA survey on young adult sports wagering behavior to assert why strict gambling regulation is necessary. That survey, released last week, indicates that 58 percent of 18- to 22-year-olds are engaged in sports betting.
Of those surveyed, 12.2 percent said they have placed a bet on a sports event using an online sportsbook located outside the US.
Judd-Stein said Massachusetts has led the national discussion on consumer protections and protections of young adults and minors, especially as it relates to sports betting advertisements. Illegal operations make regulators’ jobs more difficult, she said.
“We must strive to balance policymaking to ensure our new regulatory market advances the well-being of all residents while working to not just compete with the illegal market but also put it out of business,” she said.