American Gaming Association ( AGA ) research shows that Americans bet an estimated $ 400 billion with illegal sports betting and iGaming operators annually —— mostly offshore —— robbing states of $ 4.6 billion in taxes each year .
AMERICAN GAMING ASSOCIATION
Seizing the Momentum
Successes Grow Against Offshore Operators
BY TRES YORK
Today , online sports betting is legal in 31 U . S . jurisdictions , with online casino gaming legal in seven states . As a result , millions of Americans across the country are taking advantage of the consumer protections that the legal gaming market provides , while states and their residents are benefiting from the public projects made possible by the taxes these verticals generate —$ 3.74 billion last year alone .
However , while the expansion of legal options has eroded the illegal market significantly , many online operators based in countries overseas have continued to thrive . American Gaming Association ( AGA ) research shows that Americans bet an estimated $ 400 billion with illegal sports betting and iGaming operators annually — mostly offshore — robbing states of $ 4.6 billion in taxes each year . None of these operators are licensed and overseen by U . S . state gaming regulators , nor do they provide any of the consumer protections that the regulated market does .
That ’ s why it ’ s so encouraging to see state gaming regulators , in the absence of enforcement by the federal government , take the lead and begin cracking down on offshore gambling sites .
TAKING ACTION In recent months , we have built considerable enforcement momentum against the illegal , offshore market .
At the state level , gaming regulators in Col- orado , Connecticut , Michigan and West Virginia recently sent cease-and-desist letters to offshore operator Bovada directing the company to end operations in their states . Colorado and Michigan have already secured Bovada ’ s compliance .
These successful enforcement actions are proof that states have the tools to fight back against offshore operators , and should serve as blueprints for other states to follow — not just with Bovada , but with the numerous other offshore operators that fill the market . These combined efforts will build pressure on illegal operators and their support networks to comply with U . S . legal authorities and make doing business significantly riskier and more difficult .
At the federal level , Congress has also decided to act , with President Biden signing legislation in March that directs the Department of Justice to investigate and prosecute illegal gambling operators . It ’ s long past time for the federal government to prioritize illegal gambling and follow through on the clear directive from Congress to go after offshore operators .
CLEARING UP CONSUMER CONFUSION While we work to shut down offshore operators , consumer education is also a crucial tool against
American Gaming Association ( AGA ) research shows that Americans bet an estimated $ 400 billion with illegal sports betting and iGaming operators annually —— mostly offshore —— robbing states of $ 4.6 billion in taxes each year .
77 % of online sports bets were being placed through regulated operators last year , compared to just 44 percent in 2019 . the illegal market . AGA research shows that the vast majority of bettors prefer to use legal operators over illegal operators . So why do many consumers with legally available options continue to gamble offshore ?
The answer is often consumer confusion . Last year , AGA research found that 70 percent of sports bettors who placed most of their bets with illegal operators believed they were betting either exclusively with legal platforms or splitting their bets evenly between legal and illegal operators .
Many state regulators are doing their job through public service campaigns to highlight the pitfalls of the illegal market and emphasize the licensed options that are available . Enforcement actions by state regulators can also play an essential role in signaling to consumers that these sites are dangerous and illegal — all the more reason for more states to follow suit and the Justice Department to get in the game .
And we are making progress , with AGA estimates showing that 77 percent of online sports bets were being placed through regulated operators last year , compared to just 44 percent in 2019 .
CONTINUING THE FIGHT While we have a long way to go in our battle against offshore operators , our recent successes — combined with the continued growth of competitive , legal gaming options — show that this is a fight we can win . The AGA will continue to help lead these efforts as we capitalize on our momentum in the months ahead .
Tres York is senior director , government relations at the American Gaming Association .
10 Global Gaming Business AUGUST 2024