US gambling industry takes on illegal operators in 2022

2022 saw the US gambling step up its fight against the illegal market, with calls to “work together” against unregulated operators.
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2022 saw the US gambling industry shift up a gear in its fight against the illegal market, with calls for all parts of regulated gaming to “work together” against unregulated operators.

The American Gaming Association (AGA) has been prominent throughout the year in calling for tougher action against the illegal market. Back in April, the association wrote a letter to the US Department of Justice Attorney General Merrick Garland detailing the impact unregulated gambling can have on consumers, state economies, and legal operators.

Bill Miller, President and CEO of the AGA, stated in the letter: “While the challenge of illegal gambling is not new, the brazen and coordinated manner in which it occurs—both online and in communities—has elevated this problem to a level that requires significant federal attention. 

“We urge the Department to make it a priority to act…to protect American consumers, crackdown on illegal operators, and enforce federal regulations.”

The letter demanded the DoJ educated the public on the legal market and the dangers of illegal operators. It also urged them to open an investigation against unlicensed, offshore operators, as well as clarify that skill games must comply with the Johnson Act and AML standards with hefty sanctions imposed on those who don’t.

The AGA’s document was further supported by a Congressional letter sent to Attorney General Garland in June – signed by 28 members of Congress – which identified illegal operators as “predatory operations” that “expose our constituents to financial and cyber vulnerabilities”.

The Congressional letter also warned the DoJ that it “cannot turn a blind eye to the fact that the illegal market is thriving and operating unfettered”.

The letter noted: “The illegal operators are not interested in helping bettors wager responsibly by providing checks like time limits, budgets, or self-exclusion. They do not adhere to federal or state financial regulations, so consumers can never be sure if their information is secure or if they will receive their winnings. 

“These operators are not bound by age restrictions, meaning children and young adults can be exploited by these websites. 

“Finally, these illegal operators do not help promote the integrity of sporting contests by sharing with sports leagues information related to unusual betting patterns or insider betting, as many regulated sportsbooks do.”

Alongside being supported by the AGA, the Congressional letter was also backed by Sabrina Perel, the NFL’s Vice President and Chief Compliance Officer.

Closer to the end of the year, the AGA published research highlighting the financial impact of the unregulated market, revealing that Americans were wagering $510.9bn a year on illegal operators, resulting in a $13.3bn loss in tax revenue for gaming participating states and a $44.2bn loss in annual revenue for the legal gaming industry.

Per vertical, the research discovered that legal igaming is being affected the most in terms of handle, while states are losing out the most in taxes from unregulated machines.

Miller called on all parts of the legal gaming industry to come together to help stomp out the illegal and unregulated gambling market.

He stated: “All stakeholders—policymakers, law enforcement, regulators, legal businesses—must work together to root out the illegal and unregulated gambling market. 

“This is a fight we’re in for the long haul to protect consumers, support communities, and defend the law-abiding members of our industry.”

The foundation for the fight against illegal operators has been set, with an even stronger push expected by the regulated industry in 2023.