Offshore sportsbooks to hit $17bn in 2020, says H2

The presence of offshore sportsbooks and casinos remains a key argument when pushing for regulation of online betting and gaming in the U.S.

Regulated sports-betting has grown strongly in some 20 states since the repeal of PASPA in 2018.

But unregulated operators have continued targeting the U.S. and enjoyed strong growth in the process.

And this does not include offshore casinos targeting U.S. players.

Offshore benefits

Perversely, perhaps, offshore sites have benefited from the spread of regulated online betting in the past two years.

Consumers are now taking an interest in sports-betting thanks to the industry’s high profile. Many have opened accounts with offshore sportsbooks without realising those sites were not regulated.

Numbers are hard to confirm because of the nature of the activity.

But data consultancy H2 Gambling Capital says the size of the illegal market is underplayed.

David Henwood, Director at H2, says: very few other markets than U.S. sports betting have started with such an entrenched offshore presence.

“The problem is the overall increase in exposure for (regulated) sports betting generally has also initially bumped the amount of illegal betting.”

A recent survey by the American Gaming Association found that 52% of sports bettors had participated in the illegal market during 2019.

Updating those findings into H2’s calculations, Henwood says the offshore market has grown a new peak of c$17bn in 2020.

“It means its legal counterpart (although fast developing) is still only 8% the size of all current illegal activity.”

A decade to catch up

And as the AGA data showed, 74% of bettors said it was important to only bet through legal providers.

But 55% of them believed they were betting legally.

“This is clearly a problem which needs tackling at a pan-state level,” says Henwood.

“Because at the current rate of conversion, our estimation is it will take well over a decade for the legal market to catch up,”

The news that the offshore bookmaker 5 Dimes had agreed to forfeit $46m in assets to the US authorities leaves it free, in theory at least, the enter the regulated U.S. market.

Dave Rebuck, director of the New Jersey Division of Gaming Enforcement (NJDGE), recently claimed that offshore bookies no longer had a foothold in New Jersey.

But he suggested were still active in states that were not regulated.

“Bovada, BetOnLine, they don’t take customers from New Jersey anymore. Are they still engaged in other states? Yes.”


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