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Regulators and industry call for stronger enforcement to curb offshore iGaming; legalization seen as one tool
Summary
Former New Jersey regulator David Rebuck and industry representatives told the subcommittee that legalization plus a dedicated, well-funded regulator and coordinated federal action are the most effective ways to shrink the illegal offshore market; industry representatives said licensed platforms deliver stronger consumer protections.
Speakers from regulation and the regulated industry emphasized enforcement, coordination and legalization as multiple tools to reduce offshore and illicit online gambling.
David Rebuck, the former Director of the New Jersey Division of Gaming Enforcement, drew on New Jersey’s experience and told the panel that iGaming implemented through a tethered model (where online play is run through licensed land-based casinos) proved complementary to Atlantic City’s casinos and supported state enforcement capacities.
"In New Jersey, the industry pays for that. My budget was $70,000,000," Rebuck said, explaining that regulated markets fund enforcement, investigators and auditors and do not rely on general fund dollars for regulation. He argued that legalization is necessary but not sufficient: enforcement tools, coordination with the attorney general and federal cooperation are also required to disrupt offshore operators.
Michelle McGregor, policy director at the York law firm and a consultant for the Sports Betting Alliance, presented industry data on the scale of the illegal market and argued that regulated platforms use bank-grade age and identity verification, cross-operator self-exclusion, and platform-level monitoring to prevent underage play and to intervene when risky behavior emerges.
The Sports Betting Alliance emphasized that regulated markets tend to reduce traffic to unauthorized sites after legalization and that consumers often cannot distinguish between licensed and unlicensed apps. McGregor cited national studies estimating billions in American wagers flow to unregulated operators and urged the committee to require strong identity and know-your-customer safeguards in any licensed market.
Both witnesses recommended that Virginia establish or fund a stand-alone regulator (a Virginia Gaming Commission) with investigative and civil enforcement powers; Rebuck emphasized that a unitary commission can coordinate with law enforcement and the attorney general to issue cease-and-desist orders and pursue civil or criminal actions against illicit operators.
Ending: Witnesses told the subcommittee that legalization tied to licensing, enforcement units and federal cooperation is the most realistic path to reducing offshore market share and protecting consumers.
