A bipartisan group of lawmakers has sent a letter to U.S. Attorney General Merrick Garland asking the Justice Department to prosecute offshore sportsbooks.
The letter comes six months before sportsbooks in Ohio are set to launch. Legal sportsbooks will be available to Ohioans on Jan. 1.
Gaming Caucus co-chairs Dina Titus (D-NV) and Guy Reschenthaler (R-PA) led the effort. Those who signed the letter included three Ohio U.S. representatives, Anthony Gonzalez, David P. Joyce and Steve Chabot. The letter implores Garland and DoJ to “make a concerted effort to fight illegal offshore sportsbooks.”
The congressional letter comes on the heels of a similar letter in April from the American Gaming Association (AGA). The letter asked DOJ to enforce federal laws against illegal sportsbooks and educate consumers on the threats involved with playing them.
As Ohio sports betting sets to launch; Offshore sportsbooks growing
The congressional collective is made up of lawmakers from states across the spectrum of sports betting. Some are from mature sports betting markets like Nevada. Others represent markets just about to launch sports betting, like Ohio. And some lawmakers are from states yet to legalize sports betting, including Texas.
The breadth of support indicates the scope of the problem.
While the expansion of legal sports betting has gained momentum, offshore sportsbooks have so far outpaced legal efforts. The congressional contingency and the AGA note that internet searches for offshore sportsbooks rose 40% in 2021.
Further, they found that over half of all online sports bettors use offshore books. Most don’t even realize their sportsbook is illegal. The congressional letter summarizes the pervasiveness of offshore sportsbooks:
“These dangerous operators are not relegated to the dark web, but instead are easily accessed through any computer or smartphone.”
A two-pronged approach sought
The congressional contingency tags Bovada, MyBookie and BetOnline as three of the most sophisticated offshore sportsbooks. The letter shines a light on the most “dangerous” sites in order to establish the importance of educating consumers.
Top offshore sites present a passable façade over an ugly underbelly, according to the letter.
“The protections Americans have learned to expect from legal regulated sportsbooks, like responsible gaming functions, secured personal and financial information, and identity verification, are non-existent.”
For example, Bovada’s homepage provides a self-exclusion link, which is a common feature on responsible gaming platforms. But clicking the link takes the consumer to a page with one line of text.
“If you feel you need to take a break, please contact us to have your account disabled. If you feel that you have a gambling problem, please let us know when you contact us so that we can ensure that your account will remain permanently disabled.”
No contact information for the appropriate site manager is provided. A list of “recommended” problem gambling resources is provided, but that is all.
Educating consumers on the difference between legal and illegal sportsbooks helps, but it doesn’t effectively combat the most dangerous sites. Thus, the letter asks the DOJ to “work with the gaming industry, sports leagues and other stakeholders to identify the worst actors, investigate and prosecute them.”
Lawmakers seek a response by Sept. 6. The letter asks if there’s anything Congress can do to aid the DOJ in its efforts.
How the DOJ might prosecute and shut down these sites is and has been a difficult question. What seems clear is that a case is mounting against offshore sportsbooks. Both letters document growth in the offshore industry, dangers associated with unregulated sportsbooks and deception awaiting the bettor. All are concerns that could lead to lengthy legal battles.
Competitive legal gambling options in Ohio also needed
Federal action against offshore sportsbooks has the potential to suppress their influence, but the pathway isn’t clear. As states like Ohio legalize gambling, a quality, legal product may just be the best defense against offshore sportsbooks poaching customers.
Ohio sports betting customers will have that in a couple of ways. First, the state will offer a competitive 10% tax rate for all sports betting and has decided not to tack on certain third-party fees. These are so-called “integrity fees” sent to pro sports leagues for the use of their intellectual property (the games themselves).
A competitive tax structure has a trickle-down effect on bettors in the form of better betting lines and more enticing promotional offers.
However, online sportsbooks have a complicated and somewhat costly fee structure to sort out when working in the state. This could lead to some reticence on the part of less-experienced operators who are looking for an easy pathway to opening.
Fighting offshore books endorses legal gambling
The collective hopes that a concerted prosecutorial effort by the DOJ not only protects consumers but endorses the need for legalized gaming across the country. To that end, the letter has the support of the Gaming Caucus, the AGA and most major sports leagues in the country.
AGA President Bill Miller shared his appreciation for the continued pressure applied through the congressional letter.
“After our initial outreach to the Department of Justice in April, today’s letter to Attorney General Garland demonstrates the broad interest in addressing illegal gaming. We are grateful to Gaming Caucus Co-Chairs Reps. Titus and Reschenthaler for their leadership and the members who joined this call to action.”
NFL Vice President and Chief Compliance Officer Sabrina Perel also showed support.
“We appreciate Congress’s continued engagement and join in urging the Department of Justice to address problems posed by illegal offshore gambling operators, an issue that affects all who care about the integrity of sports.”
Sept. 6 presents a timely deadline
The Sept. 6 deadline for a response imposed by the letter comes days before the beginning of the NFL season. Betting spikes during football season.
If state regulators and federal prosecutors make substantial efforts to block bad actors and attract prospective bettors to legal operators, the proof will be in the earnings.