Fight Against Illegal Offshore Sites Continues Amid Legal Market Expansion

Legal gaming offerings are expanding like never before, but that doesn’t mean the fight against their unregulated offshore counterparts has stopped. Industry leaders such as AGA Senior Vice President Casey Clark (l.) continue to advocate for the eradication of these sites, which represent a higher risk for bettors.

Fight Against Illegal Offshore Sites Continues Amid Legal Market Expansion

Think of offshore gambling sites, and you probably conjure up images of an old freighter anchored beyond the three-mile limit.

In reality, there is no boat, just digital websites.

“Offshore sites are illegal online casino and sportsbook websites that are based outside of the United States. They target American consumers who often don’t know they are betting illegally,” says American Gaming Association (AGA) Senior Vice President Casey Clark.

Among the largest offshore sites is Bovada, which has offered casino games and sports betting since 2011. In 2013, offshore sites encountered the first digital casino competition in New Jersey. And five years later, the U.S. Supreme Court overturned the federal ban on sports betting. Since that decision, 35 states and the District of Columbia have established some kind of online sports betting service, and seven offer digital casino games, including New Jersey. However, the arrival of legal sportsbooks did not drive the Quebec-based Bovada out of business.

“The regulated market has come a long way, but the illegal market had a massive head start and it would be naïve to think it would disappear overnight. Not to mention that nearly half of American adults still do not live in a jurisdiction where legal sports betting is operational and some version of iGaming is only legally offered in seven states,” Clark says.

To some degree, the offshore companies deserve a little credit—Bovada’s website resembles those of legal sites. You can see why bettors wouldn’t know the difference. This is a paragraph taken from the Bovada site:

“Bovada has been a trusted source for gaming and betting entertainment on the web. We’re real people who enjoy placing a bet on a big game just as much as you do, so we make it our business to offer the best online sportsbook experience possible. In addition to a sportsbook that’s open around the clock, we offer a comprehensive poker room that features popular tournaments and cash games. Those looking to blow off some steam with a little slot or table game session will find what they’re looking for.”

Nothing sinister in that passage. Nothing sinister about why Bovada can make betting sweeter than legal sites.

For all these reasons, there’s a potential for more favorable wagering options for the patron, says Leland Moore, a spokesperson for the New Jersey Division of Gaming Enforcement (NJDGE).

“By not paying taxes and licensing fees, committing zero resources to consumer and responsible gaming protections, and not meeting stringent regulatory and licensing requirements, these illegal websites are often able to offer more appealing odds to bettors. Sports betting is a low-margin business and the financial obligations that legal operators have make a big difference,” Moore says.

Still, regulated operators are making progress; by a 3 to 1 margin, consumers prefer to gamble legally.

Offshore sites may pay little more than lip service to age verification or responsible gaming steps. They don’t have the same strict verification and anti-money laundering controls, Clark said.

Bovada claims users must confirm their age prior to opening an account. The company says it uses a variety of tools to verify the information. Bovada also offers tips such as installing parental control software. Any accounts found to have been opened by an underage individual will be disabled and any winnings forfeit. Misrepresenting your age to avoid age restrictions is considered fraud and is a serious offense, the company states.

As for responsible gaming, Bovada puts down steps for bettors to follow:

  • Be aware and keep track of how much money you are spending;
  • Avoid chasing losses and stick to your predetermined budget;
  • Only gamble money you can afford to lose;
  • Treat gambling as a form of entertainment and not a source of income;
  • Plan how much time you want to spend for each gambling session and monitor the time.

Yet Bovada doesn’t provide options to set deposit and loss limits, establish time limits, cool-off periods, something DraftKings and other legal sites do.

Not only are these illegal sportsbooks a threat to consumer protection, but according to the FBI, organized crime groups often use money from illegal sports betting operations to fund other criminal activities. These include money laundering, human trafficking, and weapons and drug trafficking.

Yet Bovada says it’s committed to playing its role in assisting the international fight against such organized crime and terrorism.

“For this reason, Bovada has implemented an effective company-wide anti-money laundering program designed to deter, detect and report suspicious activity involving money laundering or terrorist financing, bribery; corruption; other activities that may violate applicable economic sanctions; and/or the misuse of its products and services and delivery channels,” the website states.

In New Jersey, the NJDGE does not have a group dedicated to enforcement against offshore websites.

“We cover the field as our Division of State Police, Division of Criminal Justice, and the Division of Gaming Enforcement all deal with criminal investigations and, we also work with federal law enforcement,” Moore says.

The AGA has pushed for efforts from the feds to help shut down such sites. In April, the association fired a letter off to Attorney General Merrick Garland, asking for assistance.

“We have met with federal law enforcement officials several times since, and they share our interest in combatting illegal gambling,” Clark said. “By engaging Attorney General Garland, we elevated the issue, calling on all levels of the Department of Justice to get more aggressive with offshore website enforcement. The primary way the AGA is asking the Department of Justice to address illegal gambling is by investigating and indicting offshore operations that openly violate the law.”

The AGA is also collaborating with members of Congress to identify if legislation is needed to provide additional tools to law enforcement. Even companies who haven’t historically been associated with gambling, such as the National Football League (NFL), are joining in the fight.

“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,” said Sabrina Perel, NFL Vice President and Chief Compliance Officer.

Congressional Gaming Caucus co-chairs Dina Titus of Nevada and Guy Reschenthaler of Pennsylvania has also corresponded with Garland, urging the DOJ to make a concerted effort to fight illegal, offshore sports books which expose Americans to financial and cyber vulnerabilities.

“Over 157 million Americans have, or soon will have, access to legal channels to place their bets, with millions more in proximity to a neighboring state where they can wager legally,” the Congressional members wrote. “We ask that the Justice Department work with the gaming industry, sports leagues, and other stakeholders to identify the worst actors, investigate and prosecute them, and educate Americans on the dangers associated with illegally wagering on sports.”

“Offshore websites are a significant threat to consumer protections and the economic benefits legal gaming provides for communities across the country.” said AGA President and CEO Bill Miller. “We are grateful for the leadership of Reps. Titus and Reschenthaler drawing attention to this pervasive issue, and the Members who signed on to this call to action.”

Articles by Author: Bill Sokolic

Bill Sokolic is a veteran journalist who has covered gaming and tourism for more than 25 years as a staff writer and freelancer with various publications and wire services. He's also written stories for news, entertainment, features, and business. He co-authored Atlantic City Revisited, a pictorial history of the resort.