Casinos, States Can?t, Shouldn?t Wait For Feds To Combat Offshore Gambling

Written By Steve Friess on May 23, 2023

Here’s an unpopular opinion: The recent letter from gambling regulators in seven states begging Attorney General Merrick Garland to “prioritize combatting illegal, offshore sportsbooks and online casinos” was, in a word, pathetic. In a few more words, it was also a waste of time.

Yes, unregulated, overseas and illegal sites deserve legal scrutiny. In an ideal world, the weight of the Justice Department would bear down on bad actors who break American laws on everything, everywhere, all at once. But Garland must prioritize limited resources, and there are countless more significant, more immediate law-enforcement matters far higher on his to-do list than doing the bidding of America’s legal casino industry.

This is especially true because America’s legal casino industry has done zilch to combat the issue. It justs wants Uncle Sam to do something, so it has needled their regulators and state legislators to sic the federal government on the problem. Again, what a waste of time.

Spoiler alert! The feds won’t do it. Even if they had the will, which they don’t, they don’t have much of a way. Behold the lousy job they do stopping human and drug trafficking, cybertheft, cyber-attacks and any other form of international crime that actually matters. But, yeah, suddenly they’re going to say, “Gosh, we gotta get right on this!”

With what tools? How would they go about blocking, shutting down or prosecuting either established but unregulated or fly-by-night gambling outfits? Magic?

Yeah, yeah, there’s a consumer protection concern here. But the segment of the American public who are “victims” of such activity are not a particularly sympathetic bunch. They’re determined gamblers with the resources and the online savvy to fund accounts and make bets on these illicit sites. Caveat emptor!

Why didn’t all states with legal gambling sign on?

But it is baffling that on this matter, the massively lucrative casino industry seems inert and toothless in its own efforts to combat it. The best they can do is needle their own regulators in Michigan, Nevada, New Jersey, Illinois, Colorado, Mississippi and Louisiana to call on the feds to do something?

Everything about the letter is just sad — right down to the fact that the regulators of just seven of the 38 states with legal sports betting signed it. Are the other 31 are in favor of their citizens being suckered or fleeced by unsavory overseas entities? Or was whoever was responsible for getting this thing together just too lazy to make it a more national industry effort?

This letter reflects an utter lack of imagination or motivation on the part of the casino business itself to address this matter. No, they don’t have legal authority.

They have something even better.

A superior product and a solid argument.

Industry must launch PR campaign against offshore casinos

Just imagine what the industry — and, heck, the state regulators — could do instead of batting forlorn eyelashes at Washington D.C.

Where, for instance, is the public education campaign that argues to the public the advantages of playing on legal, regulated sites and apps? How is it not a top talking point in ads that your money is safer and the games are regulated to be fairer on sites licensed by states?

Here are a few talking points off the top of my head:

  • Playing on domestic sites is cheaper. You can fund your accounts without paying any fees through bank debits, PayPal, or in some cases by bringing cash to brick-and-mortar casinos, among other approaches.
  • Getting money back is also easier and significantly faster. Any online player who has ever tried to quickly withdraw money from even reputable offshore sites knows this.
  • The domestic industry cares more about you. They’re more aggressive and helpful in its messaging about how to get help for problem gambling.
  • Red, white and blue forever. Taxes paid by domestic sites stay in the U.S. to pay for schools, roads, parks, whatever.

Where are these messages in ads and public service announcements? Here in Michigan, where we are inundated with TV, email and online ads for brick-and-mortar and/or virtual casinos, I’ve never seen it. There’s often a scantily clad woman for no apparent reason and some questionable promise of a free bet or a parlay promotion.

But a spot that makes the argument that using American-regulated casinos and apps is safer? Cheaper? More patriotic?

Never.

That $500M wasted in California says there’s plenty of money for this

These are, by the way, the very arguments the industry has used so successfully with legislators, media influencers and the voting public when trying to legalize online gambling in state after state. The lobbyists insist the state should do this because their residents are playing on risky overseas sites anyway.

If it’s that effective with legislators, just imagine how effective it could be with $100 million behind it as a direct-to-consumer pitch. The betting options on overseas sites — slots, table games, sports bets — are identical to what’s available on domestic sites. (One exception: Poker, where overseas sites have many more players and a lot more action at all hours of the day and night. But that’s such a tiny bit of online casino business anyway.)

It is true that gamblers in most states have no legal, domestic option for playing online casino games. And in a dozen states, they can’t even place bets on sports. That includes the three most populous states — California, Texas, and Florida — but the attorneys general and gambling regulators in those states aren’t even in on this plea to Garland.

It doesn’t matter. States without legalization are even more ripe for a message that their lawmakers are forcing them to break the law, pay more to play, risking their money and paying taxes (if any) to foreign jurisdictions. And any dollar spent on illegal activity overseas in places where a legal option does not exist is a dollar that was never coming to domestic operators anyway.

The casinos aren’t helpless here. Nobody with those resources and that level of advertising muscle can pretend to be helpless. But if they continue to pretend they are, they don’t deserve the profits they’re chasing.

Steve Friess Avatar
Written by
Steve Friess

Steve Friess is the national gambling industry correspondent for Playin USA and its related local sites. He is also a contributing writer for Newsweek. A Long Island native who earned a journalism degree at Northwestern University, Friess worked at newspapers in Rockford, Illinois, Las Vegas, and South Florida before launching a freelance career in Beijing, China, where he served as chief China correspondent for USA Today. After his return to the U.S. in 2003, he settled in Las Vegas, where he covered the gambling industry and the American Southwest regularly for The New York Times, Playboy, The New Republic, Time, Portfolio, BusinessWeek, Newsweek, New York magazine, and many others. During that time, he created and co-hosted two successful and groundbreaking podcasts, the celebrity-interview show The Strip and the animal affairs program The Petcast. In 2011-12, Friess was a Knight-Wallace Fellow for at the University of Michigan. That was followed by a stint as a senior writer covering the intersection of technology and politics at Politico in Washington, D.C., In 2013, he returned permanently to Ann Arbor, where he now lives with his husband, son, daughter and three Pomeranians. He tweets at @SteveFriess and can be reached at [email protected]

View all posts by Steve Friess