With casino and sportsbook gambling having seamlessly fitted into the economy in states where it has been legalized since 2018, the operators behind major casinos are now calling for legal action to restrict the activities of illegal betting sites. In a letter to Attorney General Merrick Garland, the AGA has called for the Justice Department to take action under existing law to target casinos that operate offshore but target US customers.
A key motif of every bill debated in state legislatures up and down the country, whether the bills have been passed or not, is that the legalization of online casino and sports betting will lead to the creation of jobs in states that permit it. It will also provide tens of millions in tax revenue and provide for the creation of much-needed infrastructure – and the AGA’s argument revolves around the fact that offshore sites provide none of these benefits while taking potential customers from the sites operating legally.
A key part of the argument from the industry is that it is usually difficult for customers to tell that they are using operators who are breaking the law. Due to the relative absence of overhead costs for such operators, they are able to offer more competitive odds and more persuasive promotional offers to customers, who will naturally pick the casinos that can offer them a better deal. Amy Howe, CEO of FanDuel, said that the estimated loss to the legal casino industry was in the region of $15 billion annually.
As of the time of writing, AG Garland had not replied to the letter, but it is fair to assume that he will have sympathy with the industry when his reply does come. Tax revenues from gambling companies have generally been ringfenced for infrastructure designed to improve quality of life in the states affected. Cracking down on operators who fail to provide such revenues would appear to be a no-brainer for the federal authorities.
One problem that legitimate betting sites are finding is that offshore sites have developed their gaming infrastructure over years, having been in operation when betting was illegal across the United States. They therefore have a certain degree of institutional reputation and have held on to a lot of gamers who used their services when they were the only option for bettors. However, anecdotal information suggests that service users are less likely to trust known offshore operators, who have a less positive reputation when it comes to paying out and responding to customer complaints.
It is purported that one offshore provider alone accounts for half of sports betting-related searches nationwide. This does not appear to be a sustainable situation now that regulations exist to enforce fair gambling laws, so it is going to be worth watching this story as it develops. As well as writing to the Attorney General, the AGA is also understood to be in communication with search engine providers to try to ensure that offshore sites do not turn up in results for betting searches.