Nearly unanimous support
A group of 50 attorneys general have written to the United States Department of Justice (DOJ) and US Attorney General Pam Bondi, urging them to help combat illegal offshore gambling companies that accept US customers. Forty-six state attorneys general, plus those from American Samoa, Northern Mariana Islands, the US Virgin Islands, and Washington, D.C., signed the letter; the only attorneys general who did not were from Kentucky, Montana, Texas, and Wisconsin.
such unlawful enterprises undermine the rule of law”
“While we as States do all we can to protect our citizens,” the letter reads, “such unlawful enterprises undermine the rule of law, threaten consumer protection, and deprive our States of significant tax revenues and economic benefits.”
The attorneys general want the DOJ to go after offshore gaming companies “to the fullest extent available under state and federal law, both criminal and civil….”
Huge missed revenue opportunity
The letter states that illegal offshore operators bring in more than $400bn per year from US customers, which would otherwise generate $4bn in state tax revenue. The attorneys general claim that even with those massive figures, “enforcement has been scarce.”
“These offshore entities routinely operate without proper licensure, offer limited or non-existent consumer protections, fail to verify user age, ignore state boundaries, and evade taxation obligations potentially to both the Internal Revenue Service and our States,” the letter says.
They added that some offshore operators have been linked to money laundering and human trafficking and that they prey on young people and vulnerable adults without any oversight or regulation.
Follow the money
In their request for action, the attorneys general cite the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006, the infamous law snuck into the unrelated SAFE Port Act at the last second. As a result of the UIGEA, most online gambling sites withdrew from the US market.
The ones that stayed – PokerStars, Full Tilt Poker, UltimateBet, and Absolute Poker – grew to dominate the online poker landscape, for all but one, though, success did not last. The letter specifically points to April 15, 2011, known in the online poker world as “Black Friday,” when the DOJ “seized websites, servers, and domain names of companies that sold counterfeit products.”
PokerStars eventually arrived at a settlement with the DOJ
Full Tilt, UltimateBet, and Absolute disappeared, as did their customers’ funds. PokerStars eventually arrived at a settlement with the DOJ, which included acquiring Full Tilt Poker and making whole the customers of both Stars and Full Tilt.
The attorneys general told the DOJ and Pam Bondi that working with payment processors would be a wise strategy to cut off funds to illegal operators. They said both Visa and Mastercard have “signaled their willingness to investigate and address unlawful use of their networks for gambling transactions.”
