Months ago, the Michigan Gaming Control Board was part of a coalition urging the U.S. Department of Justice to make combating offshore gambling a bigger priority. This week, the DOJ provided a response.
The response was essentially, “we will keep an eye on it.”
It may not be the response the coalition was looking for, but was a response nonetheless.
MGCB part of coalition to combat offshore gambling
Back on April 28, the MGCB joined the likes of Colorado, Illinois, Louisiana, Mississippi, New Jersey and Nevada in penning a letter to the DOJ.
The coalition urged for federal efforts to combat illegal offshore sportsbooks and online casinos, making it more of a priority.
MGCB executive director Henry Williams gave Michigan’s take on the matter as part of the letter.
“In Michigan, strict laws and rules govern internet gaming and sports betting and provide consumer protections, promote confidence and ensure fair and honest gaming,” Williams wrote. “We are willing to help the U.S. Department of Justice in any way we can as it pursues enforcement of U.S. laws against offshore illegal gaming enterprises that take advantage of our citizens.”
Williams, along with other regulators, noted the dangers that illegal offshore wagering sites pose. They include:
- No age verification requirements to protect minors
- Lack of investment in responsible gaming programs
- No controls to prevent money laundering
- No guarantees of fair payouts for customers
- Loss of state tax revenue that funds important initiatives like education
Offshore operators don’t adhere to the same requirements that state-regulated operators do. That also keeps the MGCB and other governing bodies in the coalition from being able to legally settle any disputes between a consumer in their state that has issues with an offshore operator.
DOJ sends response of assurance, no new action
A letter from the Department of Justice was sent to Kirk Hendrick, chairman of the Nevada Gaming Control Board this week. The letter also has been sent to all states that were part of the coalition.
Hendrick made the letter public in a tweet.
U.S. Department of Justice correspondence responds to request by state gaming regulators regarding illegal offshore wagering. The Nevada Gaming Control Board appreciates the U.S. DOJ addressing perils of illegal, offshore sportsbooks and online casinos. pic.twitter.com/AoIhXVE0hj
— Nevada Gaming Control Board (@NevadaGCB) August 29, 2023
The letter essentially acknowledges the concern these states have while explaining how the DOJ uses its sources to combat offshore gambling.
However, there appears to be no plans to alter their approach or put a further emphasis on their efforts.
Over $13.3 billion in tax revenue lost through illegal gambling
Earlier this year the American Gaming Association reported that $510 billion is still being illegally gambled each year in the United States.
That leads to $13.3 billion in lost tax revenue for the states, which is greater than the states generated in 2021 legally ($11.7 billion).
The AGA broke down how the illegal and unregulated market impacts legalized gambling in the country.
The MGCB continues to put added emphasis on unregulated machines here in the state. In 2022, it aided in the confiscation of 373 illegal gaming machines. That also led to 17 individuals receiving criminal convictions.
Just last week, the MGCB successfully raided The Flint Arcade, confiscating 48 computers, two gaming machines and $13,260 in suspected gambling proceeds.
The raid took place at the same address that an August 2022 raid was held when the facility was called The Cellular Vault.
