With the increasing popularity of legal online betting, is it possible that Virginia will witness another significant crackdown on illicit online gambling platforms in the future?
A dozen years ago, the online poker craze was dominated by PokerStars, Full Tilt Poker, and UltimateBet/Absolute Poker.
However, gambling activity on those websites abruptly halted following the infamous Black Friday incident in the world of gambling. On April 15, 2011, the internet poker domain names were seized by federal prosecutors, who also unsealed indictments related to the case.
Companies and executives were charged by the Department of Justice (DoJ) with:
- Bank fraud
- money laundering and
- illegal gambling.
Just picture the moment when you log in to check your account, only to be greeted by a Department of Justice logo instead.
During that period, FBI Assistant Director in Charge Janice Fedarcyk expressed
The defendants were fully aware that their business dealings with U.S. customers and banks were against the law. Despite this knowledge, they attempted to manipulate the situation in their favor. They deceived banks by providing false information about the nature of their business. Eventually, some of the defendants managed to find banks that were willing to disregard the law in exchange for a fee. Believing they could persist with their scheme, the defendants took a significant risk, but ultimately, they ended up losing everything.
The difference a decade makes
Betting is no longer limited to Vegas alone. Presently, numerous states have embraced online casino options, while even more states, such as Virginia, now provide online sports betting platforms and websites for placing wagers.
During an online gaming forum held on September 20th, Roy Pollitt, a former FBI special agent, discussed the decline in illegal betting enforcement as legal online betting gained popularity, while being hosted by iDEA (iDevelopment and Economic Association).
He stated that some states decided to adopt the stance of, “Alright, we will legalize this,” and from there, he believes enforcement became lax.
According to Pollitt, due to the need to balance various priorities, investigations into illegal betting have somewhat slipped “off the radar” of law enforcement.
It is crucial to bring it back to our attention and find a way to comprehend it. That’s the main question. We consistently mention it, and I believe we can approach it gradually and in manageable portions.
Can legal sites help stop illegal online gambling?
According to Pollitt, legal online gaming and sportsbook companies possess skilled technicians who have the potential to foster a reliable partnership with law enforcement.
In just 10 minutes of searching online, you can easily find a website based in a state like Maryland, where gambling is not legally permitted, but still offers the opportunity to gamble.
He urged legal operators to collaborate more closely and centrally with law enforcement in order to enhance the tracking of illegal gambling operations.
Demonstrate the magnitude and extent of this illegal activity and its potential consequences for the US financial system. This includes various areas like the tightly regulated crypto industry as well as traditional financial institutions, among others.
Illegal sportsbooks dodge red tape
According to Danny DiRienzo, Sr. Director of Government Relations for GeoComply, legitimate regulated books face a disadvantage due to the taxes and fees they encounter while adhering to the standards set by different states.
“He mentioned that they are in competition with websites that do not have such expenses. Assessing the exact financial impact is difficult. Many inquire about the analysis of the number of individuals being directed to illegal sportsbooks through geolocation, to which our response is ‘no, we do not endorse illegal sportsbooks.'”
He continued:
“While regulators work on drafting laws and establishing rules, it is crucial for them to remember that their objective is to regulate markets while simultaneously fostering a competitive environment for legal books.”
DiRienzo emphasized the importance of avoiding excessive restrictions on online betting that would hinder legal businesses from effectively competing against the illicit black market.
Online gambling isn’t new, even if the laws are
Jonathan Michaels, the Sr. VP of Strategic Development and Government Affairs at Sightline, concurs. He recently participated in discussions concerning the recent introduction of online gambling in Massachusetts.
He stated that the recent extensive discussion on responsible gaming was not a new concept for the state of Massachusetts. Many individuals in the state have likely already engaged in sports betting, whether by visiting another state, using a bookie, or utilizing offshore sites.
Michaels believes that responsible gaming measures will undeniably aid in supporting and ensuring responsible gambling habits. Subsequently, states should prioritize tracing the financial aspect of gambling.
“We are unaware of the destination of these funds,” he stated. “They could potentially be flowing towards criminal organizations or being utilized for activities such as money laundering.”
With the expanding legal market in various states, it is crucial for lawmakers to grasp that this is not a novel concept within their jurisdiction. The key consideration lies in whether they prefer the protective measures established by a regulated legal market or if they would rather drive individuals towards offshore platforms.
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