U.S. State Attorneys General Petition Department of Justice to Shut Down Illegal Offshore Gambling Operations
Unregulated offshore gambling platforms, estimated to generate over $400 billion annually, pose significant challenges to state economies, consumer protection, and associations with criminal activities.
Impact on State Economies
Offshore gambling operations deprive state and local governments of substantial tax revenues that would otherwise be generated through legal, regulated gaming activities. The bypassing of state tax systems and reduction of resources for public services and regulation enforcement is a major concern. For instance, Michigan has taken action to protect its regulated market, aiming to preserve tax income and maintain economic integrity within the state's gambling industry.
Consumer Protection Issues
These offshore sites often operate without proper licensing or regulatory oversight, leading to a lack of standard consumer protections. Players face risks such as unreliable payment methods, failure to pay out winnings, slow withdrawals, and loss of deposits. Unregulated platforms might also misrepresent game odds or RTP, rig games through tampered random number generators, impose hidden or exorbitant fees, or employ cryptocurrencies which, being difficult to trace, increase fraud risks without recourse. Additionally, offshore operators typically lack age verification and responsible gaming measures, exposing vulnerable players to increased risk of gambling addiction and fraud.
Links to Criminal Activities
Offshore gambling platforms have been documented as facilitators for organized crime, money laundering, and illicit financial flows. For example, the United Nations Office on Drugs and Crime (UNODC) reported that online gambling and casino junkets are increasingly used as backdoors by criminal organizations in Southeast Asia and beyond to launder proceeds from drug trafficking, human trafficking, and other serious crimes. These gambling operations tied to criminal enterprises often engage in complex schemes using online gambling as a cover, complicating law enforcement efforts and undermining legal financial systems globally.
In response, the attorneys general from 50 states and territories, including Missouriβs Attorney General Andrew Bailey, have written a combined letter to US Attorney General Pam Bondi and the Department of Justice (DOJ). The letter urges the DOJ to prioritize enforcement efforts against illegal offshore gambling operations, use its authority under 18 U.S.C. Β§ 1955(d) to confiscate assets, servers, and profits tied to illegal gambling operations, and pursue injunctive relief and seize domain names under the Unlawful Internet Gambling Enforcement Act.
Attorney General Bailey emphasized the need for decisive action, urging the Department of Justice to utilize every available tool to shut these operations down. The platforms, based overseas, often disregard state licensing requirements and offer no meaningful consumer protections, operating in open defiance of established legal frameworks. The illegal offshore gambling sites, primarily run by foreign-owned entities, avoid paying both state and federal taxes, resulting in substantial financial losses for American communities.
The unregulated offshore gambling sites often fail to verify users' ages, exposing minors to harmful and predatory gambling practices. The foreign-based operations are operating outside the law, lacking licensing, consumer protections, age verification, and tax compliance. These platforms are said to take advantage of vulnerable consumers and contribute to transnational crime.
The attorneys general are ready to work collaboratively with the US Department of Justice to protect residents and uphold both federal and state laws. The illegal offshore gambling operations contribute to more than $4 billion in lost tax revenue for state governments and divert billions of dollars from American communities. The attorneys general's efforts aim to safeguard consumers, maintain the integrity of state-regulated gaming industries, and combat criminal activities associated with these illegal operations.
General News
Recent investigation reveals that illegal, unregulated offshore gambling platforms contribute to an estimated loss of over $4 billion in tax revenue for state governments annually.
Crime and Justice
These same platforms, run by foreign-owned entities, are often used as a cover by criminal organizations for money laundering and illicit financial flows, according to the United Nations Office on Drugs and Crime (UNODC).
