American Gaming Association Calls On Justice Dept. To Enforce Gaming Laws More Tightly

Written By Derek Helling on April 19, 2022
Better Enforcement Letter From AGA To DOJ Of Federal Gaming Laws

The American Gaming Association wants to remind the United States that laws are only as strong as their enforcement. In a recent AGA DOJ letter, the message is that enforcement could be stronger.

The letter implores the Justice Dept. to enforce existing federal laws on gambling more tightly across the board. The AGA also suggests some starting places for that new level of enforcement. They are some brands that some people in the US might be quite familiar with.

American Gaming Association DOJ letter asks for tighter policing

Last Thursday, the AGA asked US Atty. General Merrick Garland to address the issue of illegal gambling in the country. The letter to Garland cited concerns about consumer safety and economic threats that unlicensed gaming poses.

Additionally, the letter says such gambling is adverse for its membership, consisting of legal gaming enterprises.

“While the challenge of illegal gambling is not new, the brazen and coordinated manner in which it occurs—both online and in communities—has elevated this problem to a level that requires significant federal attention,” AGA President and CEO Bill Miller wrote.

“We urge the Department to make it a priority to act…to protect American consumers, crack down on illegal operators, and enforce federal regulations.”

The AGA makes three recommendations on how the Justice Dept. can accomplish this. It calls upon the department to educate US citizens about legal gambling options they have. Secondly, it calls specifically outs “skill-based” machines as a problem. Lastly, it identifies a few offshore gambling websites by name.

To what degree Garland will comply with the AGA’s wishes is uncertain, though. Other indications point to his department wanting to treat gambling as a more local matter instead of a national issue.

How Garland’s Wire Act litigation signals a different approach to gaming laws

The fact is that Garland’s department is currently involved in some litigation around what constitutes legal gambling in the US. That is the ongoing saga of the interpretation of the Federal Wire Act of 1961.

The focus of the Wire Act, when Congress passed it, was creating a new tool to pursue organized crime. By aiming for the bookmaking operations, they could disrupt the funding of such activity.

At the time, Congress and President John F. Kennedy probably never imagined the Internet, much less online gambling. The law is still on the books today and how it relates to iGaming is currently before a federal court.

In a March filing, the Justice Dept. stressed it has no intention of prosecuting any company for offering online casino or online poker play. The Dept. seemed to suggest that “we’re going to leave gambling regulation to the individual states.”

That also seems to be an antithetical approach to what the AGA is asking for. At the same time, the Dept.’s approach to this issue under Garland hasn’t been completely laissez-faire.

Illegal gambling busts are happening

The Justice Dept. hasn’t sat by idly of late. It actually has many recent busts of illegal gambling operations. A few of them have spent some time in the public consciousness.

There was the recent breakup of an illegal sports bookmaking operation in California that involved professional athletes. There was also the bust of the “Uncle Mick” ring that included Casey Urlacher.

Then there’s the current prosecution of associates of former Indiana state senator Brent Waltz. The illegal activity was using gambling revenue to make impermissible campaign donation reimbursements. But with that, the convictions already gained are gambling-related.

Those are just some of the more notable recent examples. In each case, the busts involve some illicit behavior by US citizens that clearly violates established gaming law, like running an illegal sportsbook.

The lack of precedent around other forms of gambling online and jurisdictional issues might prevent the DOJ from granting the AGA’s wishes in terms of the three named offshore websites.

Could the US DOJ really shut down offshore gambling sites?

The AGA’s letter specifically mentioned Bovada, BetOnline, and MyBookie as violating federal and state laws. Whether federal agents will ever take a hardline approach as the AGA would like is a bit complicated, though.

For one thing, the DOJ has questionable jurisdiction over companies whose base of operations is outside of the United States. It definitely has no power to force other governments to enforce US laws.

Even if it could convince other governments to prosecute a company illegally operating in the US, it might become like a game of “Whack-A-Mole.” As soon as that government would shut down one site, another could spring up in its place.

Thus, the next options become limiting access in the US and/or prosecuting bettors who are US citizens. Doing so effectively could employ an army of federal agents and be a matter of whether a conviction would be worth the resources spent to obtain it.

The ability to obtain such convictions is murky as well. For a sports bet on an offshore website, for example, the DOJ would have to prove that an alleged violator not only placed the bet but that actual money changed hands as a result of that wagering.

To complicate the matter more, there is the issue of whether the federal government would have the authority to block access to a website simply because people gamble on it illegally. Finally, if these websites violate state laws, the DOJ could say that’s for the individual states to take up.

That state-level enforcement could be the AGA’s best hope when it comes to policing the skill games it mentioned in its letter. The AGA simply asks the DOJ to lead the way there.

Asking for a definitive ruling on skill games

In the letter, the AGA asks the DOJ to clarify that skill-based gaming machines must comply with the Johnson Act plus anti-money laundering standards. The Johnson Act requires all companies and people who transport gambling machines to register with the DOJ and provide other disclosures.

Such an opinion coming down from the DOJ could provide ammunition to state law enforcement on the matter of skill-based gaming machines. It’s another area in which gambling laws haven’t kept up with the technology.

For example, there’s a lawsuit currently in Pennsylvania seeking to protect one distributor of such machines from the alleged seizure of its machines. Part of the reason why the situation became litigious is a lack of clarity in state law on the machines’ usage.

A definitive DOJ ruling would allow local law enforcement in places like Pennsylvania to prosecute those who don’t comply with the Johnson Act regardless of that lack of clarity at the state level. Whether the DOJ will issue such an opinion is uncertain, though.

In the end, the best hope could be the first ask in the AGA DOJ letter. Consumer education might be the best way to cut off the demand for illegal gambling. Any aid from the DOJ in that vein would be very welcome.

Photo by Susan Walsh / Associated Press
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Derek Helling

Derek Helling is a lead writer for PlayUSA and the manager of BetHer. He is a 2013 graduate of the University of Iowa and covers the intersections of sports with business and the law.

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