Illegal Gambling Machines Endanger Consumers, Funnel Tax Revenue Away from State Economies

On Monday, the American Gaming Association (AGA) released a white paper highlighting the dangers of unregulated, illegal gambling machines proliferating across the U.S. These illegal gambling machines are not subjected to meaningful testing, licensing or regulatory standards and are often tied to criminal activity, including money laundering, drug trafficking and violent crime.

Highlights of the white paper, Skilled at Deception: How Unregulated Gaming Machines Endanger Consumers and Dilute Investments in Local Economies, include:

• Illegal gambling machines do not undergo the same stringent regulatory requirements the legal gaming industry meets, including a licensing process, game testing and reporting and responsible gaming – nor are they monitored to ensure fair play for customers. Unregulated machine operators also lack training in responsible gaming, potentially luring children and those with problem gambling behaviors to use these machines.
• Recent raids of illegal gaming machines have been tied to drug trafficking, gang activity, violence and have also been linked to several major organized crime families.

To combat the spread of illegal machines, the report recommends:

• Law enforcement and policymakers need to prioritize robust enforcement of laws to root out illegal and unregulated gaming machines.
• States and communities must not authorize these machines and continue to erode regulations and permit unnecessary consumer risk.
• Businesses should actively remove illegal and unregulated games on their properties.

The regulated gaming industry and law enforcement communities share concerns about the threat illegal gambling machines pose to communities.

“History has taught us that unregulated gambling gives rise to an array of legal and social concerns and ultimately erodes public confidence in the safety and integrity of the whole gaming industry,” said Arizona Attorney General and former Director of the Arizona Department of Gaming Mark Brnovich.

“Legal gaming provides immense benefits to the communities it serves – and operating with a gaming license is a privilege that our industry takes seriously,” said AGA Vice President of Government Relations and Gaming Policy Counsel Jessica Feil. “Unfortunately, there’s been a rapid increase of unregulated gaming machines that exist in the shadows, taking advantage of loopholes and flouting the law, with little to no oversight. These machines ultimately endanger consumers and communities, fueling problem gambling and crime while drawing important tax revenue away from states.”

Background

Maintaining the integrity of the gaming industry and continuing to benefit our communities is a top priority of the AGA. Casino gaming is now a legal, regulated industry in 44 states, generating over $261 billion in economic impact and $41 billion in direct tax revenue, supporting more than 1.8 million jobs nationwide. Illegal gambling machines have been found in dozens of states and continue to bypass these laws and regulations, harming communities and consumers nationwide.