Sports Betting Regulators Association CEO Ed Martin admitted the job of regulators involved in policing illegal gambling is tough.
“Some of the state regulators are civil regulatory agencies,” Martin said during the SBC Summit Americas session “Crackdown on Unregulated Gaming: Where States Draw the Line.” “They don’t have police powers. Some do, but illegal gaming crosses state lines. The technologies, in terms of the resources for some of the regulators to deal with what they are responsible for dealing with, are adequately funded and equipped, others are not. You’ve got a bunch of individual agencies all trying to do the best they can with what they have, and this is much bigger.”
As state regulators increase efforts to address illegal gambling sites, they’re faced with pressures to define what is illegal and to make sure underage patrons are not targeted. Nakisha Skinner, Commissioner of the Massachusetts Gaming Commission, noted that her daughter just turned 21 and is in no way ready to deal with illegal sites.
“It’s the reality of having her be subject to these advertisements on TikTok and Instagram,” Skinner said. “That’s one where you have a need for redress.”
Skinner added that those who voluntarily exclude from casinos aren’t subject to exclusion from illegal sites.
“If you’ve excluded yourself voluntarily, there’s no way for an unregulated operator to know that,” Skinner said. “They could care less that you’ve self-excluded. Those are some of the protections that patrons of regulated sites are getting the benefit of that they wouldn’t otherwise get necessarily with an illegal operator.”
Moderator George Rover, a managing partner for Princeton Global Strategies, noted the proliferation of illegal gambling sites over the last decade and questioned why they’re still thriving. For David Rebuck, former New Jersey Division of Gaming Enforcement Director, the increase is due to the lack of negative consequences.
“It’s not a criminal act,” Rebuck said. “They don’t risk losing their money or being cited,” Rebuck said. “One of the weaknesses in any criminal activity is, are they a victim or are they contributing to the illegal action and the ability of the illegal operator to continue to profit and make money?
“We’re very limited and there’s only so much we can do. Until it becomes a priority and a much bigger issue, we’ll really struggle in this area. I don’t want to be a downer, but if you’re not aggressively attacking it jointly, as was mentioned by others, you’re really just subtly allowing it.”
Susan Bala, Advanced Compliance Technology President and CEO, said the unregulated market currently is worth $5.1 trillion. Bala said it’s the third largest market economy on the planet and it’s unregulated, untaxed, and “rife with money laundering.
“Where does that money go? That money goes into the drug trade, human trafficking, real estate,” Bala said, referring to a case in Vancouver, Canada, where real estate prices soared by 700% after illegal money came in, bought real estate, and priced out Canadians.
“It’s rife with problems for society in devastating ways, but there’s a second level of impact,” Bala added. “This is an industry that’s exploding worldwide, but it’s a brand-new environment. You can’t go knock on the door, you can’t see the people. It’s anonymous to the player, but it’s anonymous to who’s online.
“The United States has been very bullish. All of these state jurisdictions have done a good job in the past to have strong regulations. … Everybody’s doing what they can do with what they have, but they don’t have everything. This is a digital marketplace and you need digital tools to solve this problem.”
Bala noted that cease-and-desist orders are basically “a slap on the hand.” Shut a site down, and 10 more pop up.
“There has to be a community of people attacking this problem,” Bala said. “It’s a global and digital problem. The focus is technology in cooperation with enforcement and the regulators. We think this has to be a community of regulators, operators, and leagues that are coming together at every level, not in competition, but to actually solve a problem that could destroy this industry.”
