International edition
November 29, 2020

Illegal sports betting is driven largely by confusion about online operators

More US sports bettors shifting to legal markets, AGA finds

More US sports bettors shifting to legal markets, AGA finds
Bettors overwhelmingly prefer legal operators, with 74% saying it is important to only bet through legal providers.
United States | 07/21/2020

Average spending with illegal bookies fell 25% in legal sports betting states last year, while legal online and mobile betting spend increased 12%. More than half of consumers who placed most of their wagers with illegal operators believed they bet legally. Legal sports betting is available to 22.4 M more American adults than before the COVID-19 pandemic.

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ew American Gaming Association (AGA) research shows consumers are moving their business away from illegal bookies and toward legal options. Average spending with illegal bookies fell 25% in legal sports betting states last year, while legal online and mobile betting spend increased 12%. Illegal offshore operators also saw a three percent increase in states with legal sports betting.

The most influential factors for bettors who had shifted from the illegal to legal market are confidence that bets will be paid out (25%), awareness of legal options (20%), and a desire to use a regulated book (19%).

“We’ve known for a long time that Americans like to bet on sports. This research affirms their interest in moving toward the protections of the legal market,” said AGA President and CEO Bill Miller. “Giving consumers convenient alternatives to the illegal market, like regulated mobile offerings and competitive odds, is key for getting bettors to switch to legal channels.”

Bettors overwhelmingly prefer legal operators, with 74% saying it is important to only bet through legal providers. In spite of this, 52% of sports bettors participated in the illegal market in 2019. The study found that illegal sports betting is driven largely by confusion about online operators. More than half (55%) of consumers who placed most of their wagers with illegal operators believed they bet legally.

“Illegal, offshore operators continue to take advantage of unknowing consumers,” continued Miller. “This only worsened during the sports shutdown, with unregulated bookmakers offering odds on everything from the weather and shark migration patterns to whether your friends’ marriage will survive the pandemic. The AGA is focused on educating customers on how to wager legally and the dangers of the illegal market, especially with the return of the MLB and NBA this month.”

To help educate bettors, the AGA’s interactive sports betting map includes a comprehensive directory of licensed online and retail sportsbooks in states where sports betting is legal. In addition, the AGA is actively collaborating with federal and state law enforcement to enhance the collective understanding of the illegal marketplace; engaging publishers and media to ensure their platforms do not promote the illegal marketplace; and educating the public about the dangers associated with illegal sports betting operators.

Heart + Mind Strategies conducted this survey on behalf of the AGA between December 2019 and January 2020. The survey includes 3,451 interviews among American adults over 21-years-old of various subgroups.

As states continue to consider legalizing sports betting, AGA's newly updated sports betting principles encourage policymakers to build regulatory frameworks that protect customers, ensure robust oversight, create a competitive environment, and promote customer convenience.

According to AGA’s data, 18 states plus the District of Columbia now offer legal, regulated sports betting, with four more states poised to open legal markets in the coming months. Before the COVID-19 shutdown, 2020 looked set to become another record-breaking year with $3.5 billion legally wagered in January and February, up from $1.9 billion the same time last year. Legal sports betting is available to 22.4 million more American adults than before the COVID-19 pandemic, as Illinois, Michigan, Montana, Colorado, and Washington, D.C. have all gone live since mid-March.

Americans have legally wagered more than $22 billion on sports nationwide since the Supreme Court overturned PASPA, generating upwards of $198 million in tax revenue to state and local governments.

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