More than 80% of people betting with offshore books do not realize they are doing so, according to new research done for the Fantasy Sports & Gaming Association (FSGA.)
The FSGA had research firm Leger survey 2,000 US adults, including more than 1,500 bettors. The survey found just 19% of unregulated sportsbook users knew those sites were unregulated.
FSGA chair Stacie Stern called for “open and competitive” US sports betting markets that allow regulated sportsbooks to compete with unlicensed sites.
“This represents an incredible opportunity for increased consumer education,” Stern said.
Putting numbers to betting offshore narrative
Regulated operators have long argued that consumers simply do not know what options are legal or illegal. However, the FSGA study is one of the first to put numbers behind that theory.
“The most important thing is that customers still have difficulties telling which bookmaker is licensed and which is not,” Manuel Stan, Kindred US senior vice president, told LSR last year.
Indeed, offshore books are incentivized to blur the line between legal and illegal.
Tricks of the trade
Some operators have stolen branding from legal books to trick customers into app downloads. They also pay legitimate reporters for exposure to would-be bettors.
The tactics are clearly paying off. Earlier this month, DraftKings CEO Jason Robins noted the illegal market was still “pretty prevalent.”
“Some of the biggest bettors are still pushing their action offshore,” Robins said.
The FSGA study noted that in regulated betting states, the percentage of users using unregulated sites exclusively drops from 59% to 24%. That lines up with Google search trends.
Operators want help fighting betting offshore
Books like BetMGM have also echoed Stern’s call for sensible regulations to help fight offshore books.
As one example, operators claim the onerous tax structure in New York sports betting is forcing them to pull back marketing and bonusing.
In turn, that could encourage bettors back to the black market.
Andrew Winchell, head of government affairs at FanDuel, told a conference in London last week the industry would continue pushing for law enforcement to tackle offshore books.
“But until the DoJ goes after offshore operators that market to US players, there is only so much stakeholders can do,” Winchell said.
What else did the FSGA survey reveal?
The research claimed there was “very little cannibalization” across sports betting and DFS.
The group said 98% of sports bettors that played fantasy sports before betting continued to play fantasy sports.
Of course, that does not mean some spend is not redirected. DraftKings said recently the launch of New York sports betting had indeed hurt its DFS business in the state.
People still like betting and fantasy
According to the study, nearly a quarter of US adults – 60.2 million people – now bet on sports. This represents a 20% increase year-on-year.
Meanwhile, 50.4 million adults play fantasy, up 16% year-on-year. Around 59% of bettors/fantasy players do both activities.
According to Leger, “data collection took place from May 10-25, 2022, via Computer-Assisted Web Interviewing technology (CAWI).”