New Jersey and New York Remain Hubs for Illegal Sports Gambling
In the USA, around 38 states and Washington DC have legalized sports betting, whether online or in-person. However, wider legalization since the 2018 Supreme Court ruling on the Professional and Amateur Sports Protection Act (PASPA) has not effectively stopped the black market of sports betting in certain states.
According to recent data from the Campaign for Fairer Gambling (CFG), New Jersey and New York - two of the top states with the highest regulated sports betting handle - are still hotspots for illegal online gaming and sports betting activities. The Yield Sec report by CFG stated that an astonishing $40.92 billion worth of bets were placed through unregulated online casinos and sportsbooks by bettors in Minnesota, New Jersey, and New York, with New Jersey and New York bettors contributing $9.5 billion of that total.
CFG founder Derek Webb mentioned," The growth of illegitimate online gambling operators continues to thrive, and even with the expansion of legal gambling, these three states still harbor over 800 illegal operators who don't care about state laws."
The fact that Minnesota's high rank on the illegal gambling list is expected as they don't allow online gaming or sports betting. But it's striking to see New Jersey and New York on this list, as the former allows both forms of wagering and the latter has the highest regulated online sports betting handle in the US.
Federal Regulations Needed To Hold Back Black Market Betting, Webb Says
While gaming companies in the US primarily deal with state regulators, CFG's Derek Webb believes that more federal oversight is necessary to combat black market betting.
"This is one reason why federal involvement in the oversight of online gambling is important," he said. "We are keen to provide policymakers with accurate and reliable data, so that we can have a more balanced and informed discussion about gambling policy."
Gaming companies are known for emphasizing to policymakers and regulators that a significant proportion of their residents are already gambling illegally with offshore entities. They argue that by approving online casinos or sports betting in their state, consumer protection will increase, and tax revenue will also be generated for the state. However, the situation in New Jersey and New York appears to contradict this theory.
Stunning Figures on Black Market Betting
In Minnesota, an approximate $1.5 billion was wagered on illegal iGaming forums, and bettors there spent $929 million on unregulated internet sportsbooks. This already represents worrying data, but it becomes more serious when examining New Jersey and New York.
In New Jersey, where both iGaming and online sports betting are permitted, residents there placed nearly $1 billion in bets with local bookies and illegal online sports betting sites and an additional $719 million with untaxed online casinos, according to CFG.
In New York, where some politicians are seeking to legalize iGaming, residents spent an eye-watering $3.4 billion on unregulated internet casinos and another $1.9 billion on illegal sportsbooks, CFG found.
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