Offshore lines counterproductive to the ultimate goal of regulation

Why Is DraftKings Investor Fox Sports Pushing An Offshore Sportsbook?

Offshore sportsbook

The battle between legal sports betting and illegal offshore sports betting is hiding in plain sight in the US. Just look at this capture from yesterday’s episode of Lock It In:

The 0-13 run of picks from host Clay Travis is now the second-least trustworthy thing to emerge from this young show. This is a betting program on Fox Sports, one of the largest broadcasters in the country, citing lines from an offshore sportsbook.

It gets even worse.

Fox apparently still is invested in DraftKings, so the graphic is promoting both the black market and a direct competitor. You have to imagine the folks at DK HQ are none too thrilled to see that.

What’s the problem?

Big casino companies like MGM and Caesars aren’t the only ones licking their chops at the prospect of widespread US sports betting. There’s DraftKings Sportsbook and FanDuel Sportsbook too, of course, but even they have a steep path to the summit.

Operators based in foreign countries have seen their stock rise since the US Supreme Court decision on sports betting. Many have been serving American customers for years, enjoying what amounted to a monopoly over the market. With plenty of time to refine their offerings, their platforms and prices are among the best available.

While offshore sites enjoy a myriad of benefits — lack of oversight and taxation among them — the law is not on their side. BetOnline might be legal in the gambling haven of Antigua, but it is violating federal law in the US.

The lack of understanding from the general public and the lack of alternatives to convert high-volume offshore bettors to the legal market pose a long-term threat to the new industry.

Illegal sportsbooks ramping up their efforts

Those pesky laws aren’t stopping unscrupulous offshore sportsbook operators from asserting themselves in the US. In fact, illegal brands seem to be appearing with unmatched frequency of late.

Examples are worryingly easy to find.

Just this week, a Politico reporter cited the “latest Vegas betting line” for the 2020 presidential election. Political props are a dead giveaway you’re dealing with an offshore sportsbook; you won’t find them in Nevada or any other regulated US market. Those lines originate with an unregulated sportsbook based thousands of miles from Las Vegas.

Pro Football Focus drew some recent ire for misunderstanding the legality of one of its sponsors, too.

Newsflash: it’s not.

Even the leader of the free world gave an offshore book an unexpected bump in the national spotlight.

A shared responsibility to shun illegal options

You’d expect a data scientist or the president of the country to know better, but reporters generally can be forgiven for citing these lines. Many simply don’t know the difference yet, and offshore sportsbook companies are doing everything they can to keep it that way.

It’s the books themselves that are the bad actors here.

They publicly portray their products as viable alternatives, working hard to camouflage themselves among the regulated industry. They spend money to sponsor television programs and place their brands on Twitter accounts with a blue check mark and a big following.

There’s plenty of blame to go around, and the federal government deserves a slice, too. Although the Department of Justice intervened to shut down illegal online poker sites in 2011, it hasn’t yet put offshore sportsbooks in its crosshairs. A quick internet search for betting options in the US still turns up mostly illegal, offshore sites.

With more states moving toward legalization, more regulators and revenue departments are learning the extent of the problem. The head regulator for NJ sports betting, David Rebuck, says his agency has identified at least 108 illegal sports betting websites operating in the US.

Rebuck expressed a desire to address the black market, but the federal government might be the only entity with the capacity to rip out the problem at the roots. Although the industry has no appetite for federal oversight, operators could certainly get behind a broad effort to eliminate their most threatening competitors.

Eric Ramsey
- Eric is a reporter and writer covering regulated US gambling, sports betting, and DFS. He comes from a poker background, formerly on staff at PokerNews and the World Poker Tour.