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U.S. state gaming regulators' recent efforts to prevent prominent offshore gambling websites, such as Bovada, from accessing consumers in their jurisdictions is an extension of state-level enforcement initiatives dating back several years, according to one policy expert.
“You can look back even to multiple states expressing the desire to get this done with the U.S. Department of Justice back in April of 2023,” said Brendan Bussmann, managing partner with the Las Vegas-based advisory firm B Global, citing a letter authored last year by leading state regulators calling for increased urgency in tackling offshore competition faced by regulated online betting operators.
Bussmann said the growing number of states issuing cease-and-desist letters to Bovada, arguably the most prominent offshore platform in the U.S. market, “continues to be about protecting consumers in each of these jurisdictions while also allowing only licensed operators to conduct business”.
A coalition of seven state gaming regulatory bodies asked the Department of Justice (DOJ) last year to prioritize targeting illegal offshore sportsbooks and online casinos. The state regulators signing the letter were from Colorado, Nevada, New Jersey, Michigan, Illinois, Louisiana, and Mississippi.
Regulators from Colorado, Michigan, Louisiana, Connecticut, Ohio, and West Virginia have sent letters to Bovada in recent months demanding the operator cease business in their states.
“States with legalized gaming have gone to great lengths, through robust gaming laws and regulations, to ensure that each state can protect its citizens and regulate gaming in an efficient, effective manner,” the group of seven regulators wrote in their two-page letter to the DOJ dated April 28, 2023.
“Gaming licenses are a privilege, and the role regulators play in this area is foundational to gaming integrity and consumer confidence. Offshore operators who offer their products into these highly-regulated state jurisdictions are doing so in contravention of not only state laws, but federal law.”
In response, the DOJ told regulators they appreciated their views on the matter, but the department “has undertaken, and continues to pursue, investigations into illegal gaming”.
The letter was in August 2023 by the Nevada Gaming Control Board just days after the DOJ announced the arrest of Richard Sullivan, of St. John’s, Antigua, on charges of racketeering, money laundering and operating an illegal gambling business connected to the offshore website Sports Offshore.
Sullivan was indicted by a federal grand jury in Boston in August 2010. However, he was not arrested until 13 years later at John F. Kennedy International Airport in New York while proceeding through customers upon his return to the United States from Antigua.
Other federal investigations have targeted illegal bookmaking operations involving several Las Vegas casinos.
That has led to three bookies pleading guilty to federal charges and Scott Sibella, the former president of Resorts World Las Vegas, entering a guilty plea deal over failure to file suspicious activity reports (SARs).
In 2013, New Jersey began to allow in-state online gaming, which led to the New Jersey Division of Gaming Enforcement (DGE) cracking down on marketing affiliates and illegal offshore sites the following year.
The DGE sent cease-and-desist letters to six marketing affiliates warning them they risked civil and criminal sanctions if they continued to promote unlicensed gaming websites that were accessible by state residents.
In response, Full Flush Poker and the Winning Poker Network’s Black Chip Poker and Americas Cardroom announced in May 2014 that they would stop accepting players from New Jersey, Nevada and Delaware.
“Offshore operators and affiliates continue to be aggressive in working the U.S. market where to the average consumer, these may look legit,” Bussmann said. “State regulators and the Feds have an obligation to address these illegal activities to protect consumers and the legal market.”
“Bovada is just one of many that are continuing to prey on the U.S. consumer."
Louisiana Regulators Target Bovada
Louisiana last month became the latest state to issue a cease-and-desist order requiring Curaçao-based Harp Media to block residents from gaining access to its offshore sports betting and casino games site Bovada.
On its website, Bovada says it operates in the United States, except for 10 states and the District of Columbia. The operator recently added D.C. and Connecticut to its list of restricted states.
As of Tuesday (September 3), Bovada had not complied with the Louisiana Gaming Control Board’s (LGCB) order to immediately restrict residents from accessing their sports betting and casino website and add the state to its restricted list.
“Recently our regulatory colleagues in states like Michigan and Connecticut have sent similar letters, which has caused Bovada to restrict access to its site for residents of those respective states,” LGCB chairman Christopher Hebert said during an August 15 control board meeting.
“It is my sincere hope that Louisiana will join that list of restricted states based on our letter,” the chairman said.
Hebert did not discuss what options the control board would pursue if Bovada did not comply with their letter, but instead took the opportunity to urge the federal government to “use its resources to crack down on companies that have in place the regulatory, legal and financial safeguards to operate within the U.S. betting markets”.
