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Regulated Runaround

The American Gaming Association has gone on record to urge enforcement against illegal gaming machines and for illegal online casinos

Regulated Runaround

Enforcement efforts to stamp out illegal gambling have not been happening—either online or in the real world.

Let’s talk about those illegal gaming machines first. You can find them all over. Pennsylvania, Missouri, South Carolina and many other states have convenience store machines, bartop versions in saloons and restaurants, and even full-blown slot parlors that do no other business than offering these games.

In some cases, they resemble the Japanese pachinko parlors where you can exchange a bucket of BBs for a “prize” that you can take down the street and exchange for real money. (Full disclosure, I’ve never been to Japan to witness this personally, but this is what I’m told happens there.)

In Virginia, which at one time was crawling with these illegal games, state officials finally came to their senses and phased them out. Once they realized that the state was getting no tax revenues from them and they were unregulated so players could be cheated out of their scarce winnings, they finally acted. Why these other states allow this to proliferate is a mystery, but one that is explained by campaign contributions.

The companies that manufacture these illegal games are the cash cows in this equation. They try to justify their machines by saying they’re skill games—as if that’s an excuse—and just good, clean “entertainment.” They make so much money selling or leasing these games that they can afford high-priced lobbyists who spread campaign dollars around quite liberally.

To hear the politicians make the arguments for these games is actually quite comical, but dead serious. Even the local and state police get involved—or choose to not get involved—at the behest of these politicians. It has to stop.

Now let’s move onto the internet. Illegal offshore casinos and sportsbooks operate with impunity from Caribbean islands, Central American countries and small island nations in the Mediterranean or the North Sea. Some of them actually have licenses from these jurisdictions, but when you consider that the pitch these nations make is that their regulatory costs are the lowest around, you can see that integrity isn’t their main concern.

While those companies operate in the open, they still have to acquire players, and they do so by paying exorbitant affiliate fees to media in countries where their product is illegal. Some of these media are respected newspapers or internet sites that offer gaming news as a cover for their real business—shilling for these illegal casinos and sportsbooks.

The authorities and regulators turn a blind eye to these blatant operations that steer players to illegal sites. Once again, taxes are avoided and there is virtually no consumer protection for these customers. There are many horror stories about players who win big jackpots and never get paid. Or even worse, players who deposit large sums of money and never get it returned.

Our affiliate company, iGamingPlayer.com, was one of the first legal affiliates licensed in New Jersey in 2014, and now we’re licensed in more than a dozen states. That process isn’t cheap or easy, but it gives visitors to our site confidence that they won’t get cheated and will get the best and most valuable advice about gambling on the internet.

We refer these players to legal, regulated casinos and sportsbooks where they get the most for their money, and know that they are protected from the fraud that runs rampant in the illegal online casinos.

Not only should these illegal online casinos be shut down, but those companies that accept money for delivering players to those casinos should be fined substantially for their activities. But that would take a concerted effort by gaming regulators, law enforcement and legislators for that to happen, so it isn’t.

The American Gaming Association has gone on record to urge enforcement against the illegal gaming machines and also for illegal online casinos and those that supply them, but, for the most part, it has fallen on deaf ears. State regulators, federal officials and especially the illegal offshore operators have ignored the pleas.

Maybe if we got enough players who were swindled by offshore casinos and sportsbooks, we might get their attention. Until then, pressure your state regulators and public officials to recognize that people and their governments are hurt by these illegal operators. Who knows? Losing enough money might make them listen.

 

 

 

Roger Gros is publisher of Global Gaming Business, the industry's leading gaming trade publication, and all its related publications. Prior to joining Global Gaming Business, Gros was president of Inlet Communications, an independent consulting firm. He was vice president of Casino Journal Publishing Group from 1984-2000, and held virtually every editorial title during his tenure. Gros was editor of Casino Journal, the National Gaming Summary and the Atlantic City Insider, and was the founding editor of Casino Player magazine. He was a co-founder of the American Gaming Summit and the Southern Gaming Summit conferences and trade shows. He is the author of the best-selling book, How to Win at Casino Gambling (Carlton Books, 1995), now in its fourth edition. Gros was named "Businessman of the Year" for 1998 by the Greater Atlantic City Chamber of Commerce, and received the Lifetime Achievement Award from the American Gaming Association in 2012.

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