The Department of Justice is under increasing pressure to crack down on offshore sportsbooks. A campaign began by the American Gaming Association (AGA) in April has culminated in a Congressional letter to the Department of Justice requesting action against illegal online gambling operators.
The congressional letter, signed by 28 members of Congress, addresses Attorney General Merrick Garland and requests that the DOJ “make a concerted effort to fight illegal offshore sportsbooks.”
In closing, the letter requests the DOJ to “work with the gaming industry, sports leagues, and other stakeholders to identify the worst actors, investigate and prosecute them, and educate Americans on the dangers associated with illegally wagering sports.” And finally, the letter asks the DOJ to respond by September 6th, 2022.
The American Gaming Association (AGA) initiated the latest push for DOJ action in April when it penned a similar letter to Attorney General Garland. The Congressional letter seems to have been heavily influenced by the AGA’s initial request.
“Our country’s leaders are clearly and appropriately alarmed by the prevalence of offshore sportsbooks, and law enforcement must act to identify the worst actors, investigate and prosecute
The AGA has long tracked the offshore sports betting industry regarding legal forms of gambling at home. In a 2020 study, the AGA made some alarming discoveries regarding consumer education and illegal operators' impact on the regulated industry.
For instance, the study found that although 74% of sports bettors say it’s important only to use legal sportsbooks, more than half use illegal offshore sportsbooks. And even more surprisingly, 84% of the bettors who use unregulated offshore betting sites were surprised to learn they were using illicit sportsbooks.
A more recent study commissioned by the Fantasy Sports & Gaming Commission backed those findings. The 2022 study found that 81% of the people who use unregulated sportsbooks are unaware they’re doing business with illegal operators.
In addition, experience has proven the offshore market will be hard to tame. Any notions that legalization and regulation would naturally channel bettors away from the offshore market in numbers big enough to disrupt illegal sportsbooks have long since expired.
Individual operators and state-level regulators have tried various measures, but their solutions don’t pack enough punch individually. The Department of Justice could add some serious weight to future efforts, but offshore sportsbooks have shown they are nothing if not resilient.
Attacking the problem head-on would require expensive and time-consuming international investigations. And further, there is no guarantee they would do much to blunt the industry’s demonstrated ability to persist under withering fire from regulators, payment processors, and law enforcement.
If the DOJ acts, it will have a tall order on its hands and assume responsibility for solving a complex problem. If it doesn’t act, the status quo continues.