New research from the American Gaming Association (AGA) shows that the fight against illegal sports betting operators is beginning to tip in favor of the newly legalized sector, with consumers moving their business away from illegal bookies and toward legal options.
According to the study, 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 3% increase in states with legal sports betting.
The most influential factors for bettors who have 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,” 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.”
Bettors overwhelmingly prefer legal operators, with 74% saying it is important to only bet through legal providers. Despite 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 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.
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.