The past 19 months have proven something sports gamblers have known for years – the majority of the residents in the US wanted legal sports gambling. Since PASPA was reversed in May 2018, the list of states that offer legal sports gambling markets has steadily risen and continues to grow every month. Adam Bjorn, a gambling industry executive and sports gambling expert, discusses the state of sports gambling in the US and why staying away from offshore sites is the best option.
Currently, there are 19 legal states that have live sports gambling markets. There are another six that have legalized the activity, but which are not yet ready to give the green light to sportsbooks since they’re still putting together the final touches for the requisite regulations and guidance. In addition, there are two states that are actively working on legislation and which could see progress either by the end of this year or sometime in 2021.
There are another seven states that had no legislative discussion on sports gambling this year, and still another 16 that discussed the issue, but rejected all proposals. Still, there is a good chance, according to most analysts, that around 40 states in the country could have legal sports gambling markets within another three to four years.
In addition to the US, Canada is also considering updates to its sports gambling legislation. Currently, single-game wagers are not allowed, only parlays, but this could change through a bill currently being discussed by lawmakers. Should Canada make this change, it could also have a positive influence on the sports gambling industry in the US and Bjorn explains, “Opening Canada’s sports gambling markets opens awareness to the activity as a whole. With talk that there might be a Canada-only NHL division in the upcoming season because of COVID-19, the country could see sports gambling changes soon, and the attention this is getting is spilling over to the states in the northern part of the US.”
Offshore sports gambling does not necessarily equal illegal sports gambling; however, there are several reasons why using operators outside the US is not recommended. Asserts Bjorn, “While most states do not specifically target offshore sportsbooks in their laws, this could soon change, especially as states want to ensure they secure as much tax revenue as possible to help them recover from the COVID-19 pandemic.”
Using an offshore sportsbook implies a certain level of insecurity. There are some that are regulated appropriately; however, US sports gamblers have little recourse should something go wrong. In addition, at some point, they will need to retrieve the funds held in their online sports gambling accounts, which could have tax implications that they have to be ready to consider.
Sports gambling revenue by offshore sites has been estimated to be around $2.5-$3 billion annually. “As US states have legalized sportsbooks,” says Bjorn, “they have placed a tax on the revenue these earn, which varies from state to state. However, even at a conservative 3%, the figure is $90 million if $3 billion is wagered outside the US. Add this to the tax revenue states get from legalized sports gambling, and the total could reach up to twice that amount. Today, states want every dollar they can attract after losing tens or hundreds of millions from the coronavirus, and can look for ways to legally keep sports gamblers betting in-state.”
It’s becoming more difficult to deposit and withdraw funds with offshore sportsbooks, and the fees associated with requesting payouts can sometimes be significantly high. This is another reason why sticking with a stateside, regulated sportsbook makes better sense. Even though they’re not legal everywhere yet, they’re increasingly common, and there are ways to place bets using a proxy in many cases. The US sportsbooks offer better consumer protections and guidelines, which adds a lot of entertainment value to sports gambling.