The Supreme Court’s 2018 ruling that brought sports wagers back into legal territory holds a lot of potential for the domestic sports betting industry. Until then, the underground bookies kept tabs on a lucrative industry, valued at around $150 billion a year. However, offshore sportsbooks were thriving, as there are few laws internationally that legislated the operations. Now that U.S. citizens will be free to enjoy open wagers, there is a concern that the growth of domestic operations will trample the success of offshore efforts, such as those located in the Caribbean. However, it will take some time before domestic betting is able to gain much ground, so that alone should be some comfort for the bookies who are worried.
The Stronghold of Offshore Markets
Since they have had the upper hand in the betting industry, offshore markets are deeply ingrained as primary resources for people all across the world. For years, U.S. sports bettors have moved outside American shores and regulated options for offshore wagering. For many, these decisions have proven to be winning combinations. Las Vegas is a hotbed of those who traffic in wagers, sending their money during March Madness or other sports tournaments. Not only do offshore sportsbooks have the upper hand due to longevity, but they are also the only entities maximizing the power of technology in order to improve accessibility. Mobile betting has become the largest platform for placing wagers on sports events around the world, and yet only two states within the U.S. -Nevada and New Jersey- allow for legal mobile betting. However, as more well-financed companies get their infrastructure up and running, domestic sports betting could begin to catch up to the billions that are being taken in overseas. Almost two dozen states have passed legislation to protect legal sportsbooks and betting operations, and as more awareness and accessibility occurs, American competition won’t just be left to the sporting event.
General Growth Potential
Before the repeal of the Professional and Amateur Sports Protection Act (PASPA), those who wanted to know about sports betting and event wagers had to really be in the know. It wasn’t just something that could casually be talked about with the guys or around the office. Now that sports betting is becoming less taboo, offshore sportsbooks have already noticed an increase in their player bases, a trend which is projected to continue. State legislation is making it easier for a new player to move past a local bet made at the county’s horse race and discover the world of offshore or online betting. Since the government has stated sports gambling is legal, and all states may not be able to provide that opportunity, offshore sportsbooks are readily available for NFL bettors or those with an interest in eSports. For those who are just interested in the wager, the sport matters very little. However, a knowledge of the sport and understanding of the stats is usually helpful when placing your bet.
Making the Most of Legal Opportunities
There is little concern for the legality of offshore sports betting, as many of the well-known sportsbooks overseas are legal in their host countries. However, the U.S. has tried to stop U.S. residents from exchanging money with these sportsbooks. Laws required U.S. banks to flag any transactions between operators and patrons of these establishments. Even though the Unlawful Internet Gambling Enforcement Act was designed to dissuade Americans from taking in part in sports betting, it did not actually prohibit placing offshore wages. While the act made it harder to operate, the price points of services, as well as the web-based or mobile platforms have given offshore sportsbooks the upper hand in attracting consistent business. These companies also offer more expansive betting options.
Even though domestic sports betting will soon rival its offshore counterparts, there is no danger of the one being able to eliminate the other. There are plenty of sporting events to go around, but more than that, offshore betting has a pricing advantage. States that are in the process of constructing legislation often look at the tax revenue of a situation, and given the bounty that is sure to come from legalized sports betting, the taxation rates might be too steep for American residents. Although the state wants a meaningful slice of the financial pie, if sportsbooks are bringing in the revenue they way, their pricing won’t be very attractive to new customers. On top of the state tax, every legal sports betting entity will have to pay an additional federal excise tax. This could make it really hard for domestic-based sportsbooks to compete with international entities. Local sports-betting operators will also be facing royalty fees in order to receive national league data, which could be upwards of millions of dollars, in addition to the state licensure fees. In Pennsylvania, the cost of the sports-wagering license if $10 million. These costs are ultimately conveyed on the consumer, once again making cheaper offshore sportsbooks a better wager.
Those who operate in the offshore world are not bothered by the incessant taxing or fees assignments, nor do they pay any fees to national sports leagues. While several U.S.-based casinos and gaming stakeholders have implored lawmakers across the country at the state-level hearing to abandon these multiple tax rates and fees, progress has not yet been made. The inferior pricing that accompanies domestic sports betting will not be able to compete with those in the offshore market, allowing offshore bookies to stay profitable and in control of the sports betting industry.