Shutting Offshore Gambling Sites Impossible

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Thursday, April 14th, 2016 | Written by Charles Washington

Over the past few years, the Las Vegas Sands Corporation (LVSC) has been pushing for the U.S. Congress to put an end to legal online gambling across the nation. However, a recent statement made by the casino group’s spokesperson, Andy Abboud, shows that the company is now refining its focus on a more specific niche within the iGaming industry, namely offshore sites that currently operate illegally in the country. Still, it’s going to be difficult to accomplish that goal simply by bringing legal action against the companies involved.

Why The Change in Focus?

While it’s not clear exactly what has caused this apparent softening in the LVSC’s stance, it is most likely related to the fact that the company’s efforts to lobby politicians to pass the ‘Restore America’s Wire Act’ (RAWA) have produced no results. The American Gambling Association (AGA) has even now joined the Sands in welcoming a crackdown on illegal operators, and there is currently a general sentiment that putting offshore sites out of business would prove hugely beneficial for the whole industry. Responding to the sudden change in approach, the Poker Players Alliance remarked via its twitter account:

“Adelson/Sands rep claims they are “refocusing” away from RAWA to stop illegal offshore iGaming. Clear sign that iGaming ban is unpopular-jp.”

A Look Back at Attempts to Stop Illegal Online Gambling

In the past, a number of attempts have been made to put a stop to online gambling, including the following:

– Blue Monday. Instigated by the Maryland Department of Justice, this crackdown on offshore sports betting sites involved the seizure of domain names, but did nothing to stop operators. Within no time, sites were up and running again under new domains.

– The Calvin Ayre Case. The Maryland Department of Justice indicted the founder of the online gambling site Bodog and put him on the Immigration and Customs Enforcement’s (ICE) 10 Most Wanted List. After criticism and mockery, the department removed him in 2015, and he has never been prosecuted for running an illegal offshore site.

– Black Friday. This infamous date in the history of online poker remains the one time when the U.S. succeeded in shutting down illegal iGaming operators. The difference between this effort and the ones discussed above was that it was a nationwide crackdown. Efforts from just one state are unlikely to produce results similar to Black Friday, and it’s worth noting that one site, Absolute Poker, still attempted to operate even after the event.

The Solution That Works

As you can see, it’s difficult to stop offshore sites simply by cracking down on them with the methods available under the law. That doesn’t mean it’s impossible to put a stop to illegal online gambling. In the three states where iGaming is legal, New Jersey, Nevada and Delaware, offshore gambling sites rarely operate, while the increased competition from legal sites seems to make it not worth the risk of trying to accept players from within those locales.

This is a similar phenomenon to what has happened with the black market marijuana trade since Colorado, Washington, Oregon, Alaska and the District of Columbia legalized the use of recreational marijuana. As a result, there is now the option to purchase cannabis legally, which has in turn led the illegal drug trade to turn their attention elsewhere. In 2015, marijuana sales hit $2.7 billion in the US, with research company ArcView Group stating that full legalization across all 50 states could see the marijuana retail market top $35 billion in revenue by the start of the next decade. In the meantime, as one Mexican marijuana grower explained to NPR last year:

“Two or three years ago, a kilogram of marijuana was worth $60 to $90. But now they’re paying us $30 to $40 a kilo. It’s a big difference. If the U.S. continues to legalize pot, they’ll run us into the ground.”

Conclusion

So what can be done to stop illegal online gambling? Legalize it, regulate it heavily and make it so that those who want to avoid paying taxes with offshore locations don’t have a profitable market to operate within.