Chris Cylke, vice president of government relations at the American Gaming Association (AGA), recently shed light on a troubling trend in the gambling world. He noted how alluring promotions, favorable odds, and the option to gamble with cryptocurrencies are like sirens to sailors, drawing people into the perilous waters of illegal gaming.
Illegal Gaming: A Subterfuge that Threatens Consumers and the Legal Industry
Illegal gaming isn’t just a shadowy concept—it’s a multifaceted beast. Offshore online casinos, unregulated slot machines, and illicit sportsbooks all play a part in this underhanded operation. These clandestine activities, hidden from the watchful eyes of regulators, pose significant threats to consumers and undercut the integrity of the legal gambling sector. Imagine a game where one player has chips they didn’t buy—there’s no way the game remains fair.
Cylke is avid about educating consumers on these risks. Shared by local media outlet Vegas Inc., Cylke emphasized that illegal gambling is not a victimless misdeed. It’s a risky endeavor where players could have their personal and financial information fall into the hands of unregulated entities, which may be lurking anywhere across the globe. There is no oversight, no safety net; it’s like wagering on a game with a loaded deck where you never see the dealer.
The Legal Gambling Sector’s Uphill Battle Against Illicit Operations
It’s no secret that legalized operators are battling tough competition from these illicit outfits. These entities, free from the burdens of licensing fees and taxes, operate in the shadows, throwing off the balance in the industry. In 2022 alone, illegal betting operations raked in an estimated $510 billion, while the legal market suffered a loss of over $44 billion due to this underhanded competition. The legalization of sports betting across numerous U.S. jurisdictions has chipped away at illegal sports betting, but the monstrous shadow of illegal online casino gaming still looms large, with over $337 billion in illicit transactions.
Illegal Sports Betting: The $13.3 Billion Elephant in the Room
Consumer education is a recurring theme in Cylke’s dialogue. He observed that some individuals unknowingly wander onto illegal sites due to their prominence on search engines. Others, in an attempt to dodge scrutiny, knowingly seek out these sites, further muddying the waters of this complex issue.
Alan Feldman, UNLV’s director of strategic initiatives, chimed in, spotlighting the absence of consumer protection on unauthorized gaming websites. These rogue sites, devoid of tax obligations, siphon valuable revenue from state coffers—revenue meant to fuel local economies. An eye-opening AGA report illustrated that state governments lost an astounding $13.3 billion in tax revenue due to illegal and unregulated sports betting.
Feldman didn’t mince words, calling upon all U.S. states that have legalized gambling to recognize the havoc unlicensed gambling establishments wreak. He argued that the primary motive behind legalizing sports betting was to generate additional tax dollars for public benefit. Yet the specter of illegal gambling complicates the landscape, as victims rarely come forward, thus deepening the issue.
Combatting the illicit gaming industry demands a double-edged approach: stringent law enforcement and heightened public awareness. Feldman pointed to Nevada as a pioneering example, utilizing technologies like GeoComply to detect and block unauthorized betting activities. Meanwhile, Cylke praised Michigan’s proactive stance in issuing cease-and-desist letters to major illegal gambling websites.
As the battle lines are drawn, it’s clear that the stakes are high. With robust enforcement and informed consumers, the scales can be tipped back in favor of fair play and regulated gaming.
