Las Vegas Sands recently announced what appears to be a softened stance towards online gambling. The company had been pushing a bill known as Restore America’s Wire Act.
The goal was to outlaw most forms of online gambling in the U.S. The bill virtually died after receiving little support and having a disastrous committee hearing led by RAWA’s sponsor, Rep. Jason Chaffetz.
Las Vegas Sands’ Andy Abboud told GamblingCompliance last week, “We haven’t backed off of our focus on [RAWA], but we need to find a way…to be able to shut down illegal offshore operators.”
The American Gaming Association echoed this sentiment.
This is a goal the entire U.S. gaming industry can get behind. Offshore sites siphon money away from legitimate operators that pay taxes, create jobs and protect players. The only problem is that there is not any way to eliminate the unlawful competition through law enforcement.
District of Maryland Justice Department actions accomplished little
Two big actions originated in the Department of Justice Office in the District of Maryland. One was described as “Blue Monday” by the online gambling world. This case was aimed at offshore sportsbooks. Skins of the Winning Poker Network were also involved. Domain names were seized. The sites simply moved to .eu and .ag ones and continued on as business as usual.
The poker tables never went offline. BetEd, a minor player in the offshore sports betting industry, was the only casualty.
The Winning Poker Network has more than doubled in size since Blue Monday. Its payment processing is among the quickest in the entire offshore online gambling industry. The site manages to pay players through Bitcoin, cash transfers and debit cards in just a day or two.
The other major indictment to originate out of the Maryland Justice Department was against Calvin Ayre, founder of Bodog. The Bodog.com domain name was seized. The site had already moved Americans to Bovada.lv. All other players accessed the site through Bodog.eu. The .com domain forwarded to the appropriate site.
Nothing came out of the Bodog indictment. Calvin Ayre appeared on the ICE 10 Most Wanted List for more than a year. Other alleged criminals on that list were mostly involved in drug and human trafficking. An operator of a gambling site seemed way out of place, a point mocked by the online gaming industry. Ayre was removed from the list in 2015 but he was never apprehended.
Bovada only accepts players from the U.S. Like Winning Poker, it processes many withdrawals within a day or two. The company manages to process checks and bank wires to U.S. players within a week or two. It is the third largest poker site in the world, according to PokerScout.
Black Friday was rare successful action
One of the reasons Black Friday was successful is because PokerStars chose to cooperate with the U.S. Government. Full Tilt Poker and Absolute Poker were not properly capitalized. Black Friday exposed this and led the sites to collapse, something that seems would have inevitably happened without the help of the federal government.
Bitcoin changes the game for offshore sites
Bitcoin is an anonymous cryptocurrency that has become a favorite among serious online gamblers. The digital wallet permits players to easily move money from one site to another and between the eWallet and a bank account.
There is little law enforcement can do to stop these transactions. Withdrawals from gambling sites that use Bitcoin are processed in a matter of hours.
Regulated states prove it is only way to attack unlicensed sites
Bovada and Winning Poker Network do not accept new players from these states. Merge Gaming and Equity Poker Network IP block these states from their software. Equity Poker goes the additional step of not permitting visitors from Nevada, New Jersey and Delaware from accessing the website.
These sites accept players from at least 40 other states that have not yet regulated online gambling.
Marijuana legalization movement shows regulation supplants black market
Marijuana is legal for recreational use in four states. There are 19 others where it is permitted for medicinal purposes. The effect of this is that the black market is declining. Regulated competition is helping to put the underground marijuana market out of business.
The same holds true for online gambling, as demonstrated by the major poker and sports betting sites not engaging with regulated markets. The expansion of online poker in the U.S. would expand liquidity, a major factor in players in regulated states taking the risk of playing offshore.
It is understandable to want to fight illegal gambling operators. It makes sense from every angle. It is nearly impossible due to current technology and payment processors willing to take the risk for a big payday.
The only way to end illegal online gambling is to decrease demand for it. That can only be done by legalizing online gambling and regulating it on the same level as live casinos. Nevada, New Jersey and Delaware have already demonstrated how this can be accomplished effectively.