State gaming regulators want federal crackdown on illegal sites

Nevada has joined six other states in pushing the federal government to crack down on illegal offshore internet gambling casinos.

Nevada Gaming Control Board Chairman Kirk Hendrick sent a letter last week to U.S. Attorney General Merrick Garland urging a larger push to combat illegal gambling.

Kendrick’s April 28 letter also was signed by leaders of six other gaming regulatory bodies in Michigan, Colorado, Illinois, Louisiana, Mississippi and New Jersey.

“As the primary regulators of the legal gaming industry in our seven states, we write today to urge the Department of Justice to prioritize combating illegal, offshore sportsbooks and online casinos,” Kendrick’s letter said.

“The dangers posed by these unlawful operations are well known, including a lack of investment in responsible gaming programs, loss of state tax revenue that funds important initiatives, no age verification requirements to protect minors, no controls to prevent money laundering, an absence of guarantees that customers will receive fair payouts and much more,” he said.

The American Gaming Association issued a report in November that estimated the illegal and unregulated gaming market at $510.9 billion a year, costing the legal regulated markets in the United States an estimated $44.2 billion, preventing states from collecting an estimated $13.3 billion in tax revenue.

“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,” AGA President Bill Miller said at the time the report was released.

Online casino gambling is only legal in New Jersey, Delaware, Pennsylvania, Michigan and West Virginia, with online poker play authorized in Nevada. The matter is confusing to some consumers because online sports wagering with the use of mobile devices is legal in several more states, including Nevada.

The letter was signed by David Rebuck, director of the New Jersey Division of Gaming Enforcement; Henry Williams, executive director of the Michigan Gaming Control Board; Marcus Fruchter, administrator of the Illinois Gaming Board; Dan Hartman, director of the Colorado Division of Gaming; Ronnie Johns, chairman of the Louisiana Gaming Control Board; and Jay McDaniel, executive director of the Mississippi Gaming Commission.

The regulators said they are concerned that revenue generated by illegal sites may be used to bankroll other illegal activities such as human trafficking and the drug trade.

“We understand and appreciate the fact that the Department of Justice’s jurisdictional responsibilities are broad and, consequently, priorities vary over time. However, the many significant threats posed by offshore illegal gambling cannot be addressed by states alone and, therefore, require heightened federal attention and engagement,” Kendrick’s letter said. “We strongly encourage the Department of Justice to prioritize investigation and prosecution of these offshore sites, and stand ready to provide any assistance that we can as state gaming regulators.”

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.