In a March 17 article entitled, “Without Sports, U.S. Bettors Are Getting Creative,” a Wall Street Journal reporter wrote, “Online sports book Bovada has a solution: it is allowing patrons to wager on the weather.”
The next day, a similar post on Yahoo Sports! said, “Customers at Bovada can place bets on when Bernie Sanders will drop out of the presidential race, which Westworld character will be the next to perish or what Wednesday night’s winning power ball number will be. The online sportsbook is now even offering gamblers the chance to bet on the weather.”
Consumers looking at those news outlets on those days got what amounts to free advertising for an offshore website that is not legal for players in the U.S.
Other mainstream media outlets also have lent legitimacy to that provider, which is based in Costa Rica, and other bookies that exist in gray and black markets around the world. Collectively, they generate an estimated $150 billion per year from bettors, with little to no accountability to either their players or the markets and regulators where they operate.
What’s the Difference?
A central tenet of the campaign to expand legal sports betting in the United States was that it would keep Americans from resorting to offshore sportsbooks, which are unregulated and in some cases have been linked to criminal enterprises.
The distinction between legal and illegal online bookies may be even more important in the post-Covid age, as additional states consider sports betting as a potential source of jobs and revenues.
According to Bill Miller, president of the AGA, major media outlets only muddy the waters when they tout offshore sportsbooks.
“Unfortunately, many consumers are still unable to distinguish between safe, legal U.S. sportsbooks and unregulated offshore operators,” wrote Miller in a LinkedIn column in mid-May. “This becomes especially difficult when mainstream publications continue to legitimize the dangerous illegal market, blurring the lines between legal, regulated sports betting and the predatory, unregulated offshore market.”
Some publications and news sites aren’t at all discriminating in their coverage, he added, “with some pieces reading like they’re copied and pasted from a PR pitch.”
He added that the illegal market has been used to launder money, fund the illegal drug trade and even underwrite the suffering of human trafficking.
“So it’s more than frustrating that legitimate news outlets would give them the patina of credibility,” Miller told GGB News. “These are not just offshore operators. They are illegal, and the public should stay away from them.”
Why It Matters
In a 2012 column for USA Today, then New Jersey Senator Ray Lesniak made the case for expanded legal sports betting in the U.S., saying it would “take some of the power away from organized crime and offshore internet operators and put it in the regulated hands of existing casino and racetrack operators.
“Legalizing sports wagering recognizes the inevitable—that people are going to bet on sports, whether the practice is legal or not, and that we should provide a safe and legal avenue for them to bet on their favorite teams,” wrote Lesniak, who went on to spearhead the drive to bring legal sports betting to New Jersey.
In May 2018, the U.S. Supreme Court struck down the Professional and Amateur Sports Protection Act (PASPA), which had banned sports gambling in every state except Nevada and a few that had been grandfathered in, Oregon, Montana and Delaware. Since then, 40 states have introduced legislation to legalize sports betting, and 16 more are in some phase of implementation.
Lesniak pointed out that a legal sports betting industry in the U.S. would mean new jobs and new economic opportunities for the “ailing gaming establishments” in Atlantic City, where four casinos closed in the years following the Great Recession.
In a June interview with GGB News, Lesniak said his thesis was proven with the opening of two new casinos in Atlantic City—Ocean Casino Resort and Hard Rock—since sports betting launched, and the return of some 15,000 jobs.
‘Education Gap’
Miller said the AGA is going after news organizations not to excoriate them, but to educate them.
“Yes, these legitimate news organizations should know better,” he said. “In the pre-Covid world, part of the excitement of the successful launch of legal sports betting in America was the fact that it’s a safe, transparent and regulated marketplace, unlike the illegal market, which is still unfortunately cited by reputable news organizations.”
He said offshore books are sometimes cited because they take odds on political races and other matters that aren’t covered by legal sportsbooks. Even so, he added, the news outlets are “really looking for eyeballs.”
Bettors should beware of offshore bookies “because they don’t contribute to tax revenues in the state, they don’t produce any jobs in the country and there is no guarantee you’ll get paid.”
“You don’t know where the proceeds of the betting are going,” Miller said. “You’re not at all clear how your personal information is going to be used. If you’re funding (bets) with a PayPal account, what happens with that data? It’s a worry for all of us, all the time, even in the most legitimate business transactions in cyberspace.”
Needless to say, he added, “there is no such thing as responsible gaming” with illegal sportsbooks.
Much of the day-to-day work of calling the media to task falls to Caroline Ponseti, director of media relations for the AGA. “Any time we see an outlet that references some offshore site, we reach out with some educational material, saying this is not regulated in the U.S., and here are the dangers associated with promoting them,” Ponseti told GGB. She also points news outlets to the AGA’s interactive map of legal operations in the U.S., which is regularly updated.
“Sometimes you don’t get a response,” said Ponseti. “Sometimes they say, ‘Hey, I didn’t realize this,’ and print a correction. It depends. We’re trying to be as diligent as we can with outreach, because there’s obviously an education gap out there.”
“There’s an element of whack-a-mole to all this,” Miller conceded. “It’s somewhat frustrating.”’
Allies in the Fight
The issue could take center stage with the upswing in iGaming, as well as increased participation by the states, Miller said. He pointed to New Jersey’s iGaming revenues for the month of April: almost $80 million in online casino ($74.8 million) and poker revenue ($5.15 million), according to the state Division of Gaming Enforcement, up 23.4 percent from $64.8 million in March and more than double the $36.6 million the state won last year in April.
“It’s a significant amount of money,” said Miller. “It’s unclear what it’s going to be like once the world opens back up again, but I agree that we’ll probably continue to see growth in the iGaming space, and the states, who all have a vested interest in the success of those platforms, will be our allies in helping to call out the illegal operations. We have a shared imperative.
“As the states become more aggressive, my hope is that the Department of Justice also will be more vigilant in helping us grow the nascent U.S. market and destroy the illegal market. I talk all the time with regulators, who understand and share that view.” Miller called on the Federal Trade Commission and Federal Communications Commission to exercise their muscle as well.
Most of all, he appealed to consumers to do their homework, and check the AGA list of legal sportsbooks before they place their wagers.
But what of gamblers who claim to prefer illegal bookies because of purportedly better odds and the fact that their winnings aren’t subject to reporting?
“My response would be, No. 1, you have no recourse if you win big and they don’t pay. You can’t take an illegal company to court. Then I’d ask, ‘Are you comfortable with the knowledge that the money being made on this illegal site could be funding money laundering and drug trafficking?’ And if somebody says, ‘I’m okay with those things because of better odds,’ well, there’s no talking to that person.”
Miller feels most U.S. bettors, given the right information, will realize that doing business with shady operators, with all the associated risks, just isn’t worth the gamble.
