American Gaming Association Study Shows Move from Illegal to Legal Markets
The battle for US betting dollars between illegal and legal markets continues. The American Gaming Association (AGA) is out with a new study that shows the scale tipping toward the legal however, as we continue the third full year of sportsbooks being allowed to operate on US soil. Along with the strong growth of the legal betting industry in the US has come increasing confidence in the regulated markets quickly becoming the bookies of choice. 18 states plus the District of Columbia now offer legal, regulated sports betting, which encompasses about 30 million Americans.
“We’ve known for a long time that Americans like to bet on sports,” said AGA President and CEO Bill Miller. “This research affirms their interest in moving toward the protections of the legal market. 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.”
If one of the goals of legalizing sports betting was to take action from illegal entities, that goal is apparently being realized, perhaps quicker than most expected.
Breaking Down the Findings
According to a survey conducted by Heart + Mind Strategies for the AGA and the 3,451 Americans surveyed, 74 percent of respondents said it was is important to only bet through legal providers, although 52% of those surveyed had placed some sort of illegal bet in 2019. Bettors want to do the right thing and have apparently been increasingly doing so as betting becomes more mainstream in US markets.
That led to average spending with illegal bookies falling 25% in legal sports betting states last year with a 12% spending increase for the legal side. To be fair, illegal offshore bookies also saw a 3% increase in spending from states with legal platforms.
Reasons for the Shift to Legal Vendors
There are many reasons that bettors are transitioning to legal vendors in their state and away from offshore or illegal bookies. The study identified confidence in having winning bets paid (25 percent), an awareness of legal options (20 percent), and a desire to use a regulated book (19 percent) as the top 3 reasons bettors are making the switch.
Unwitting Bettors
Interestingly, the AGA study showed that over half (55%) of those that placed their bets with offshore or illegal vendors last year did so thinking they were using a legal channel to place their wager. Those clients wanted to place a proper, legal bet but were confused by the rash of options, both legal and illegal, currently available in many markets.
“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.”
The AGA's Job Moving Forward
Obviously, the AGA is hoping to keep gambling dollars in the hands of regulated vendors so participating states can not only keep an eye on things but will also reap the rewards in the form of tax dollars.
The American Gaming Association has developed a program to educate bettors in states where legal markets exist. Interactive maps have been created to show the location of legal options and education programs have been developed to identify illegal platforms and explain the dangers that come along with them.
Conclusions
The move from the black market to legal sports betting platforms is meant to protect the gambler while at the same time generate a little taxation for participating states. Consumer protections, oversight, customer confidence, and competitive and robust markets is the goal - one that according to the newly released figures, seems to be getting met.
Legal betting entities have secured more than $22 billion in bets in the US since the 2018 Supreme Court decision to overturn the PASPA - there is a lot on the line for legal betting operators. In turn, almost $200 million in tax revenue has been returned to state and local coffers, meaning there is a lot on the line for participating states as well.
The move from illegal to legal gambling providers has been swift but it has been necessary as well. That said, there will always be a black market. With the AGA identifying areas of need and with the US bettor more informed about the differences between the two options, expect the legal bookies to take over as the unquestioned preference of American gamblers in the not-too-distant future and for offshore/illegal entities to become fringe participants in the exploding US scene.
