Illegal offshore sportsbooks took more action than legal operators in March
While legal sports betting is more common than ever in the U.S., a study of the 2024 men's and women's NCAA March Madness tournaments concludes that illegal offshore sports betting remains superior in terms of impact beyond in regulated gambling.
The Campaign for Fair Gambling (CFG) hired data analytics firm YieldSec to survey bettors betting on college basketball tournaments to find out how much market share the legal industry will gain in 2024.
The investigation found that unlicensed online sports betting platforms and apps facilitated an estimated $4.3 billion in wagers. This accounts for over 61% of overall success in the men’s and women’s postseason. The American Gaming Association, which represents the U.S. legal gambling industry, predicts that legal sportsbooks will accept $2.7 billion worth of bets ahead of the 2024 March Madness tournament.
Derek Webb founded and runs CFG. He is a veteran of the gambling industry and believes the widespread expansion of online sports betting brings an increased risk of gambling-related harm. CFG aims to advance bipartisan political gambling reforms to improve consumer protections and advocate for federal oversight of online sports gambling.
Additional protective measures required
YieldSec researchers found that at least 378 online sportsbooks were actively targeting the U.S. market during this year’s March Madness. More than 650 affiliate websites promote illegal sports betting platforms.
Social media is also flooded with advertisements from overseas bookmakers. A CFG investigation found that nearly 80% of March Madness video content posted on X, Facebook, TikTok and Instagram was associated with illegal operators.
Weber said the federal government needs to do more to prevent such bad actors from reaching consumers, many of whom are unknowingly betting on a platform that offers little player protection.
“The lack of a unified approach from government and lax regulation by states only exacerbates the problem, allowing companies with questionable backgrounds to operate freely,” Weber said. “It’s long past time for U.S. leadership to come up with unified solutions to address this widespread problem.”
Last summer, the U.S. Department of Justice assured the AGA that combating illegal offshore gambling was a top priority.
“The Department of Justice takes the issue of illegal gambling, including illegal online gambling, seriously and will continue to successfully investigate and prosecute illegal Internet gambling,” said Megan Bennett, DOJ Intergovernmental Liaison.
However, YieldSec's findings suggest otherwise, as hundreds of online sportsbooks have reached out to March Madness bettors this year, with the bookmakers not offering consumers guarantees on winning bets.
Villain Books
Offshore sportsbooks generally don't care much about responsible gambling, other than offering tax benefits or guaranteeing that player deposits are safe and bets will be paid out. The scandal surrounding Los Angeles Dodgers superstar Shohei Ohtani's former translator makes this clear.
Federal authorities said this week that Mizuhara Ippei allegedly stole more than $16 million from Ohtani to place sports bets with an illegal bookmaker. Suwon reportedly placed 19,000 bets between December 2021 and January 2024, with an average bet of $12,800.
Suwon lost nearly $41 million in betting, according to the Justice Department. Federal law enforcement said they found no evidence that Ohtani was involved in illegal gambling.
Suwon made more than $16 million in unauthorized transfers from a checking account belonging to an MLB player, referred to in the affidavit as "Victim A," who was actually MLB star Shohei Ohtani. "Transfers to the bank account allegedly were made through devices and IP addresses associated with Suwon, who served as Ohtani's translator and de facto manager," said U.S. Attorney Martin Estrada.
"I want to emphasize this: Mr. Ohtani is considered the victim in this case," Estrada added.
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