AGA seeks to partner with Google to ban results from offshore sites as part of US industry push against illegal gambling

The US gambling industry is looking to redouble its efforts to combat black market gambling. Operators, industry associations and lawmakers come together to call on federal prosecutors to crack down on illegal offshore gambling sites and ‘skill-based’ machinesthat expose actors to potential threats and undermine states’ efforts to capture tax revenues.

In conversation with CNBC, Bill Miller, president and CEO of the American Gaming Association (AGA), said the trade group and the gaming industry were looking to partner with Google and other internet search engines to stop show results with illegal betting sites.. The call to action comes as nationwide internet searches for offshore sports betting increased by nearly 40% in 2021, outpacing legal searches, according to some of the latest studies.

While online searches for offshore betting sites have declined in states that have legalized sports betting, offshore site Bovada still accounts for half of sports betting-related searches nationwide., says the AGM. In many cases, the ease of access to these sites creates confusion for many consumers, who may not even know they are betting illegally.

“What was once perhaps a relative nuisance, is now becoming a serious threat to the legal and licensed gaming industry,” Miller added. CNBC. These concerns have been echoed by operators in the legal sports betting space, including FanDuel, whose CEO Amy Howe told the quoted source that there are currently “hundreds of illegal or unregulated operators” in operation, with potentially $15 billion going through some of these offshore parts.

“It gives them an unfair competitive advantage. They can offer a better chance to the consumer,” Howe added.. Offshore operators also compete with legal operators for customers without having to invest in licensing or lobbying, or pay state and local taxes. Legal operators such as Howe’s Fanduel, DraftKings and BetMGM spend billions a year on their expansion plans.

FanDuel CEO Amy Howe

DraftKings CEO Jason Robins is also among the stakeholders who have expressed concerns about this.. Last month, he said there remained “a fairly widespread illegal market”, with some of the biggest punters “still pushing their action overseas”. And he is not wrong : according to an AGA survey, more than half of players say they continue to bet on offshore sites.

There are a number of reasons why players always opt for offshore operators. Besides sometimes not knowing that they are illegal, there are also cases where experienced players consciously choose unregulated sites because they are attracted by favorable odds or promotions, or because these sites allow high rollers to bet on credit or impose no betting limits.

In some cases, the differences in betting limits are staggering: offshore sites can let a player bet up to $50,000, while some legal sites impose a comparatively lower limit of $120. But it has a price: illegal bookmakers do not always pay when a player wins, and frequently ignore responsible gambling safeguards put in place by legal operators. howe said CNBC this approximately 25% of FanDuel customers who leave illegal operators do so because they have not received their winnings.

This new push for a crackdown comes as sports betting grows in the US, with 35 states and the District of Columbia allowing regulated betting in one form or another.. More than 157 million Americans have, or will soon have, access to legal channels to place their bets, with millions more near a neighboring state where they can bet legally.

With this expansion in mind, operators and industry stakeholders seek to protect the industry from illegal parties. In a letter to Attorney General Merrick Garland this spring, the AGM asked the Department of Justice to investigate offshore gambling sites. “While the challenge of illegal gambling is not new, the brazen and coordinated manner in which it is occurring has elevated this problem to a level that requires significant federal attention,” Miller wrote in April.

Last month, those concerns were echoed by 28 members of Congress who also reached out to Garland in their own letter., urging the DOJ to make “a concerted effort” to crack down on illegal offshore sports betting. The Justice Department, however, has yet to respond to those calls.

But while the letter from members of Congress focused on the threat posed by the offshore sports betting industry, the gaming industry as a whole has also raised concerns about a second issue: unlicensed slot machines, often found in bars, convenience stores and gas stations.

The land-based industry has long warned against these devices, which look and function like regular, regulated slot machines.their makers calling them “competency-based” in a bid to avoid scrutiny from regulators.

In April, AGA asked law enforcement officials to clarify that manufacturers of “skill-based” machines must comply with the Johnson Act. registration requirements and anti-money laundering standards, and urged them to take action against entities that do not fully comply.

“What matters is that they are not tested. There’s no quality assurance around odds,” Miller said. in his interview with CNBC. When these machines fail to pay, there is rarely liability on the part of the host site given the lack of consumer protection.

In a recent update, the AGA announced that, along with the Association of Gaming Equipment Manufacturers, it has met with FBI officials on this front.. According to the association, FBI officials confirmed there was “increased attention” to unregulated “games of skill” within the bureau.

AGA, for its part, said it was seeking to induce the state to take legislative and enforcement action against the makers of these illegal “jurisdiction” machines.. The association cites the Virginia legislature’s recent action to ban these machines as serving as a “model for other states to follow.”