PAPSA is not a panacea for U.S. black market sports betting
In the roughly six years since the Supreme Court struck down the Professional and Amateur Sports Protection Act (PASPA), sports betting operators have frequently pitched states on the potential reduction or outright elimination of illegal sports betting markets as a reason to legalize the activity .
But with 38 states and Washington, D.C., now allowing regulated sports betting, the black market remains active. The Campaign for Fair Gambling (CFG) commissioned a survey from YieldSec. One of the surprising findings is that for every regulated company such as BetMGM and DraftKings, there are more than eight illegal iGaming or sports betting operators operating in the United States or on FanDuel.
The black market is very active in the United States. “Legalizing online gambling will never sufficiently curtail illegal activity,” said Derek Webb, founder and supporter of CFG. “But the existence of the black market serves as a useful foil – a major factor in the expansion of the legal gambling industry. reason.
The CFG report shows that there are 860 illegal operators in the United States, compared with only 103 regulated operators. Last year, these unlicensed companies generated gross gaming revenue (GGR) of nearly $41 billion, compared with $16.9 billion for their regulated rivals. The 2024 Super Bowl is a prime example of this trend, as only 35% of U.S. bettors’ bets on the game were placed on regulated markets.
Why Black Market Sports Betting and iGaming Still Thriving
State-level legalization, or in some cases the lack of it, explains why “pirate” gambling remains so prevalent in the United States.
California and Texas—the two most populous states—do not offer regulated sports betting. Florida, the third most populous state, has only recently opened up and its market is controlled by just one operator. New York allows mobile sports betting, but not iGaming. This represents a large portion of the American population targeted by illegal gambling companies.
Some companies take this approach. According to CFG, 84% of U.S. affiliate sites specifically promote Internet casinos or sportsbooks that are not licensed to operate in the United States, while 41% of affiliate sites do business with both illegal and legal operators, but only 16 % of affiliates do business with this type of site. The company focuses on legal gambling companies.
Specific to sports betting, another reason why some bettors prefer to continue leaving their business to local bookmakers or offshore sites is that many regulated operators in the United States limit or simply do not deal with the most powerful players.
While sharpshooters make up only a small portion of the overall sports betting landscape, they can be promoters of regulated betting, but many of these companies fail to operate, forcing these bettors to remain in the black market.
A compelling case for reducing the black market
While regulated online gambling and sports betting have so far failed to stop the unregulated market, politicians and regulators have good reasons to continue pursuing this goal.
Consumers who place bets with unlicensed operators run the risk of not receiving any funds from winning bets or becoming a victim of digital fraud.
“The only solution to optimize market opportunities for legitimate brands, government tax revenue, responsible gaming and a safe consumer environment is to monitor online audiences, detect their activity, monitor and remove illegal content, including advertising, and “effectively enforce the law” ,” noted Ismail Vali, CEO and Founder of YieldSEC.
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Source: www.casino.org
