When legal sports betting began to spread after the Supreme Court’s landmark decision in 2018, the hope was it would kill off illegal offshore sportsbooks.
Well, it didn’t. And now, it seems that chasing them down is not a very high priority.
But a group of legislators sent a letter to Attorney General Merrick Garland urging the Department of Justice (DOJ) to devote time and money to the cause. The American Gaming Association (AGA) is optimistic the DOJ will act, according to the Las Vegas Review-Journal.
“We know this is going to be a long process,” said Chris Cylke, senior vice president of government relations for the AGA. “Our view is that the squeaky wheel gets the grease, and so by continuing to beat the drum on this, we’re more likely to see some kind of action.”
The letter went out June 29, with 26 co-signers and endorsements from several sports organizations and the AGA.
“These predatory operations expose our constituents to financial and cyber vulnerabilities; do not have protocols to address money laundering, sports integrity, or age restrictions; and undermine states’ efforts to capture much needed tax revenue through legal sports betting channels,” the letter reads.
Operators wonder why they have to compete against offshore sportsbooks who didn’t have to pony up millions in licensing fees, Cylke said. “Why is it that my app or website has to compete right alongside those who aren’t doing any of these things and didn’t lift a finger in order to open up this marketplace?” he said.
Of course, even if the DOJ decided to go after offshore sportsbooks, the case wouldn’t be an easy one to make.
Anthony Cabot, a distinguished fellow in gaming law at UNLV’s William S. Boyd School of Law, told the Las Vegas Review Journal that arresting someone in some locale in Europe borders on the impossible. Arrests, if they are made at all, often happen on a flight to the U.S., Cabot said.
The DOJ can take an indirect approach, like zeroing in on intermediaries, such as payment processors. Companies that do advertising business with the offshore sportsbooks can be attacked too. Or regulators could seize the domain name, thus preventing customers from logging into accounts.
“You can try to play cat and dog by changing domain names, but that’s really disruptive to the business,” he said.
The letter to Garland cited three offshore sportsbooks: BetOnline, Bovada and MyBookie. Jack Andrews, a sports bettor and a founder of Unabated.com, a website that provides tools and resources for sports bettors, told the RJ he wasn’t surprised to see those sportsbooks listed.
“They’ve been the three that have tried the hardest to infiltrate the U.S. subversively through guerrilla advertising,” he said.
Essentially, they just pretend that they’re legal in the U.S. and still place ads to entice American customers, Andrews said. In Bovada’s case, it uses the domain name Bovada.lv, with many customers interpreting “lv” as Las Vegas instead of Latvia.
The Garland letter said, “Internet searches nationwide for offshore sportsbooks increased by almost 40 percent in 2021, outpacing searches for legal ones, with Bovada constituting half of all sportsbook brand searches.”
In an interview with GGB, American Gaming Association President and CEO Bill Miller said that the industry is open to all avenues to block illegal cites from U.S. citizens, even through pressure by the State Department.
“We’ve talked about this with folks over at the State Department, hoping to get them to prioritize this,” he explains. “We have bilateral trade agreements with many of these countries. So far has been somewhat difficult, but it is on the list. And the list is an exhaustive one. We try and do everything that we can to at every opportunity shut them down.”
Andrews said there are many reasons why bettors might stay loyal to offshore sportsbooks. Many books allow users to play on credit and settle up after a certain period of time instead of putting up the money up front.
The main reason some big bettors are forced to play offshore is that legal sportsbooks will not take the amount of money they want to wager, Andrews said. The biggest legal sportsbooks in the U.S. deploy what is known as the “soft book” model.
“And that is that sports betting should just be for recreational use, and anyone who bets seriously is not a customer that they desire,” he said.
Richard Schuetz, a gaming industry veteran, recently wrote an opinion article about the offshore sportsbook letter for GGB News called “Dancing the Silly Dance.” In short, stakeholders are just appearing to be busy for their constituents.
Actions like the letter “are oftentimes a valuable tool before elections to remind certain companies that these politicians are on the job for them and deserve a political contribution or two,” Schuetz wrote. “The lobbyist folks like to run with such campaigns, for it keeps them top of mind with the people who pay their bills and gives the impression they are doing something.”
The letter asks for a response from Garland by September 6.
