AGA Warns of Illegal Gaming Sites without Advocating for Legal iGaming
American Gaming Association represents the United States casino industry. It advocates for legal, regulated gaming and ensures the proliferation of responsible gambling tools.
For the second time this year, the AGA has issued another warning about illegal websites offering igaming in the US. It released a new report estimating that Americans still spend approximately $511B at those offshore sites each year.
At the same time, however, the AGA has never stepped up to specifically advocate for regulated online gaming. For many years, it opposed it, and while the organization now includes legal igaming in its plans and goals, the AGA doesn’t actively lobby for state-regulated online casinos and poker sites.
Evolution of AGA on iGaming
For many years before and after Black Friday in 2011, the Poker Players Alliance represented the online poker industry in the United States. It lobbied and actively worked to legalize online poker at the state level and stop efforts to ban igaming at the federal level.
All the while, the American Gaming Association tried to ignore the igaming industry. In fact, in 2013, the AGA specifically lobbied against PokerStars re-entering the US market after Black Friday. Despite PokerStars cooperating with the government, repaying all customers, paying customers that other sites abandoned, and clearing its debt with the government, the AGA would not support PokerStars participating in any way in America.
The AGA in 2013 tried to say that it supported regulated igaming but not PokerStars. But the following year, the lobbying group withdrew its support for igaming altogether, saying it was an issue that “the association cannot lead on.”
Eventually, the New Jersey Division of Gaming Enforcement did approve a PokerStars igaming license. The site now offers online poker, casino games, and sports betting in New Jersey, Pennsylvania, and Michigan.
In 2017, there was a change in the AGA’s code of conduct to signify a bit of turning tide. The code mentioned online gambling in several sections, including working with member casinos to ensure responsible gambling messages make their way to casinos’ online platforms.
And by 2018, PokerStars ended up partnering with the AGA. Parent company The Stars Group became a member of the AGA, along with GVC Holdings (which owned partypoker) and others. This seemed to mark a change in the AGA’s view of igaming in the United States.
Still, however, the AGA never – as far as we know – lobbied on behalf of igaming or indicated any kind of full-throated endorsement of state-regulated sites.
Target: Offshore iGaming
Earlier this year, the AGA wrote a letter to the United States Department of Justice, asking US Attorney General Merrick Garland to investigate and prosecute offshore igaming and sports betting websites.
The spread of illegal gambling must be stopped. Today’s @AmericanGaming letter to the DOJ is an important step in getting officials in Washington to take action. https://t.co/6ZKCUqs6sl
— Bill Miller (@BillMillerAGA) April 14, 2022
Not even nine months later, American Gaming Association CEO Bill Miller is back with another message. The AGA now has research showing exactly how much Americans spend on “illegal and unregulated sportsbooks, igaming websites, and ‘skill game’ machines.” And the group wants the public to know that this is a threat to the US gambling industry. In fact, it is “arguably the greatest threat.”
Miller said he will use the latest report to lobby lawmakers at the state and federal level, as well as law enforcement agencies, to take appropriate actions.
Essentially, the AGA plans to “put the bad actors out of business.” He wants the entirety of the gambling industry to stand up and eradicate illegal gambling.
History tells us that prohibition does not work. Many people in the US do not have access to state-regulated gambling. And those that do – online poker in Pennsylvania, for example – have extremely limited poker available to them. So, they look to sites not regulated in the US and based offshore. What the AGA wants to do is keep Americans from accessing those betting options without (in most cases) any viable alternatives.
November 2022 Study
The report – “Sizing the Illegal and Unregulated Gaming Markets in the United States” – is a product of the Innovation Group, which did the study at the behest of the AGA. Researchers surveyed 5,284 adults in the US about their gambling behavior.
It starts with the broad numbers, an overview of the unregulated market from 2021:
-US states reported $11.7B in state gaming taxes paid.
-States lost out on $13.3B by players betting via offshore sites.
As far as revenue, the numbers are again sizeable:
-US states reported $92B in legal gaming revenue.
-Offshore sites claimed $44.2B in revenue ($26.9B in machines, $13.5B in igaming, $3.8B in sports betting).
Of the people surveyed about sports betting for this report:
-51% bet on legal sites only
-34% bet in regulated and unregulated markets
-15% bet on offshore sites only
For players of online casino games, specifically slots and table games, the numbers were:
-52% bet on legal sites only
-30% bet on offshore sites only
-18% bet in regulated and unregulated markets
🚨 RELEASE: Americans gamble an estimated $511B illegally each year, robbing state governments of $13.3B in tax revenue annually and costing the legal gaming industry $44.2B in annual revenue, according to new AGA research.
Read our full report ➡️ https://t.co/J9pdloCN37 pic.twitter.com/UPTJOxNEKf
— American Gaming Association (@AmericanGaming) November 30, 2022
The AGA didn’t include online poker in the report at all.
More than likely, online poker numbers would reflect a much higher offshore percentage. This is because only five states offer state-regulated internet poker, but most of those sites are not connected across state lines. The resulting ring-fenced markets are not profitable for most players. The most lucrative possibilities with the biggest game variety and largest prize pools are on offshore sites.
Perhaps, a greater understanding of the reason people patronize offshore sites would help organizations like the AGA to approach the issue with more care. Online poker is a different beast from other online games and sports betting, and it deserves research on its own.
Then, instead of promoting prohibition, the AGA could focus more effort on legalizing games for US players and making them competitive with those offered on unregulated sites.
