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Unregulated offshore betting cost licensed gaming operators more than $17 billion in lost revenue nationwide last year, according to the American Gaming Association (AGA). The activity is now being targeted for elimination by Nevada.
Sen. Rochelle Nguyen (D-Las Vegas) has authored SB256, which would allow Nevada courts to impose stiffer fines beyond the $50,000 fine illegal gambling operators currently face if convicted of violating the state’s online gaming laws.
The legislation proposes that certain offenses be converted from misdemeanors into gross misdemeanors while adding a required “disgorgement” of any profits associated with the activity.
Nguyen said the idea for the legislation came from discussions she had during conferences hosted by the National Council of Legislators from Gaming States and with Nevada gaming leadership, including the Association of Gaming Equipment Manufacturers (AGEM). The organization’s Executive Director Daron Dorsey was one of her law school classmates.
Dorsey said it was unclear as to how much Nevada was losing to unregulated gaming sites, but he said it was “in the millions to tens of million of dollars.”
Nguyen said she was interested in what the group was working on.
“They wanted someone to go after some of these illegal operators,” Nguyen said in an interview. “It’s a black market and it's unregulated. The bill is pretty straightforward.”
The legislation was presented in the Senate Judiciary Committee last week and received support from AGEM, the Nevada Resort Association, the Nevada Council on Problem Gambling and the Vegas Chamber of Commerce.
Dorsey told the committee that illegal online gambling is growing and not getting smaller.
“Disgorgement of profits from the illegal activity is yet another avenue that will help punish illegal operators who come to Nevada,” he said. “We also hope the enactment of SB256 will discourage illegal operators from targeting Nevada residents in the first place.”
In a letter to the committee ahead of the hearing, Tres York, the AGA’s senior director of government relations, expressed support for SB256, writing that Nevada was “an example of leadership in effectively regulating gaming.”
York said illegal operators do not offer responsible gaming protocols or other customer protection requirements mandated by regulated markets. He said illegal operators “drain money out of Nevada” that would otherwise be collected in tax revenue.
“This legislation will ensure that those active in illegal gambling operations will not benefit from those activities in any way and serve as a deterrent for other individuals that may want to engage in similar illicit activity,” he said.
Nevada’s gaming industry has long opposed the legalization of online casinos because of competition with traditional casino operations. Several companies, such as Boyd Gaming, operate online casinos in other states in conjunction with their land-based casino businesses.
Although Nevada legalized online poker in 2013, the market never grew beyond more than four operators. The only active online poker businesses currently licensed are held by Caesars Entertainment for World Series of Poker and South Point Casino. The revenue figures from online poker are so small that the Control Board does not report their monthly and year-end revenue as an individual category.
Online sports betting is offered in Nevada, but a customer has to register an account at a casino with a regulated sportsbook. Major sportsbook operators, such as Draft Kings and FanDuel, have geolocation protocols that shut off their mobile apps in Nevada.
Just six states, including New Jersey, Pennsylvania and Michigan, have legalized online casinos in the past two decades. According to the AGA, legal online casinos produced $8.4 billion in revenue in 2024, a 29 percent increase from 2023.
However, the AGA said in February that illegal online casinos took in more than $402 billion in wagers during 2024, which resulted in $17.3 billion in revenue for those operations.
This story was published March 19 by The Nevada Independent and is republished with permission.