America’s Offshore Gambling Problem

March 6, 2023

In the USA, offshore gambling is becoming an alarming issue since it enables players to wager with foreign betting sites that are not subject to Federal Laws and Regulations.

The illegal wagering defrauds state governments for nearly $13.3 billion in tax revenue annually. The problem lies in the unregulated sportsbooks, iGaming, and skill game machines.

Although it is always preferable to use licensed online casinos and sportsbooks when gambling online rather than play on unregulated sites, the alluring no-deposit bonuses on offer attract American players to illegal gaming platforms. 

Keep reading to learn how the US Government and other institutions are trying to tackle this problem. 

The Negative Impact of Offshore Gambling

According to the latest report by the American Gaming Association, state governments lose $13.3 billion in tax income annually because of unlawful gambling, which is over $2.5 billion more than what was made by legitimate operators in 2021 ($11.7 billion). 

Also, it reduces the legal gaming sector’s yearly income by $44.2 billion, or half of the $92 billion in revenue generated from both commercial and tribal sources in 2021.

This trend has a huge impact on the US government, which has struggled to monitor and oversee the offshore gambling industry.

Significant dangers for customers are also created by a lack of transparency and regulation in offshore betting sites. Some offshore bookmakers use dishonest tactics, such as withholding profits or even taking advantage of clients’ financial and personal data.

Consumers are seriously put at risk due to this lack of responsibility, and there are few options for redress if something goes wrong.

Some of the main issues with offshore gambling in the US include:

* Money Laundering – offshore operations used for money laundering are difficult for the US authorities to trace.
* Lack of Regulation – gaming sites that aren’t regulated by US authorities and lack consumer protection.
* Tax Revenue – illegal gaming operators don’t pay taxes and defraud state and local governments.
* Gambling Problems – easy access to betting and gaming activities that often leads to irresponsible gambling and financial hardship.
* Discredit Legal Gambling – unregulated betting sites undermine legal gambling by offering a seemingly better gambling set-up to attract players.

Finding a Solution to Put an End to Offshore Gambling  

The US Government has made efforts to cease illegal activities and seek a legal resolution in cases of illicit offshore gambling. The federal government has passed laws and adopted acts that allow the Department of Justice to file legal claims against offshore betting organizations.

The Wire Act

The federal government tried to solve the issue by adopting the Wire Act, a statute that forbids the use of wire connections for the transfer of bets or wagers. Its main purpose is to combat organized crime and prohibit any communication that contains betting information.

This act is applied in all sorts of offshore gambling cases. It allows the prosecution of entities and also individuals that are part of illegal gambling operations. 


One of the most fundamental laws now in existence is the UIGEA, the Unlawful Internet Gambling Enforcement Act, which entered into effect in 2006.

By forbidding banking institutions from handling transactions relating to internet gambling, this regulation makes it more challenging for offshore gambling sites to operate in the US.

The Department of Justice 

In 2011, the DOJ filed its own criticisms about the Wire Act because of its lack of implication for all types of gambling. The DOJ has also seized several domain names of more than 10 illegal online gambling sites and traced its main operators.

The efforts by the DOJ and the US government are extremely important in this battle not only for tracing illegal gambling sites. They also provide a better environment for licensed online casinos and sportsbooks to operate on the regulated market.

Players’ Rights and Safety

Government organizations have rigorous controls and monitoring over legally operating internet casinos and betting sites. Offshore betting sites aren’t regulated by the same laws and regulations so there is no assurance that the games are fair or that customer information is secure. Licensed online casinos and sportsbooks are accountable to both consumers and legal bodies.

And, when it comes to gambling and spending real money – trust is crucial. Consumers have access to government authorities or legal procedures in the event of an issue such as a dispute over wins.

Players are advised to wager with regulated operators because the authorities can guarantee consumer protection and fair play. At the same time, they preserve the integrity of the gaming sector and create better conditions in the US iGaming market.

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