Recently passed Assembly Bill (AB) 1294 will make it easier for the Californian authorities to seize profits from illegal gambling activities which, according to the American Gaming Association’s estimate, generate over $10 billion a year in ill-gotten gains. This includes online casinos as well as sportsbooks.
Though current forfeiture laws do address the proceeds of ‘criminal profiteering activity’, Rudy Salas, California Assembly member and co-author of the new bill, explains that “the current definition of criminal profiteering activity is somewhat outdated, and only applies to bookmaking crimes and does not extend to illegal slot machines or illegal gambling devices.” By expanding this definition, the bill will, according to Salas, “have a substantial impact on illegal gambling by cracking down on the profits of the criminal operators who are running illegal sweepstakes cafes and underground casinos.”
Small Fines and Short Prison Stays – A Cost of Doing Business
So far, most operators of illegal gambling activities were charged with misdemeanors and had to pay relatively modest fines. Even being imprisoned for a short period of time wasn’t discouraging as they knew their illicit profits would still be there when they got out.
Owing to the high profitability of illegal gambling machines, convicted operators weren’t too bothered about the cost of closing down the business and relocating it elsewhere, thus making it way too difficult for the authorities to keep up. That should no longer be so as the AB 1294 is supposed to deprive convicted operators of funds necessary for setting up new operations. It will enable the California Department of Justice to seize money in convicts’ bank accounts as well as their other assets.
New Bill Expected to Significantly Reduce Crime Rates
The new bill has a wide support. Ronald Lawrence, president of the California Police Chiefs Association, emphasizes the importance of the California’s (legal) gambling industry for the state’s economy and believes AB 1294 will help disrupt illegal activities which negatively impact the local community.
According to the Kern County sheriff’s office, “crime rates can increase tenfold around the location of an illegal gambling operation” and the former prosecutor Umberg also believes illegal gambling operations to be directly or indirectly related to other criminal activities such as assaults, drug abuse and human trafficking. The Kern County sheriff’s office very likely supports this assumption having found AK-47s and prostitution as well as illegal drugs at about 100 illegal gambling sites raided over 14 months.
Assembly Bill 1294 could be a model for other states and Annemarie McAvoy, former prosecutor specialized in financial crime compliance, hopes they’ll follow suit. “Forfeiting funds under existing state laws is often very difficult, if not impossible, to do,” says McAvoy who believes the new bill will become a powerful law enforcement tool. “By taking away the profit motive, operators lose the incentive to continue that criminal activity.”