Citizens JMP Securities has released a client note detailing America’s offshore sports betting market using data from all 50 dates.
The investment bank, using data provided by sports betting tool Juice Reel, determined that America’s offshore sports betting market closed 2024 with a $163 billion handle. That year, the handle results included both offshore operators and the use of online bookies. By comparison, regulated and licensed operators generated a $150 billion handle in 2024.
In its note, Citizens shared how it believes compliance impacts offshore wagering.
“The improvement in underlying technology (risk management) and fruitless spending dissipating resulted in players migrating back offshore as more restrictions were placed on wagering to minimize risk,” said client note authors Jordan Bender and Eric Ross. “We believe the lack of KYC, compliance, bet limits, credit/crypto, etc., are the main selling points for these players to stay offshore.”
Citizens JMP highlights Florida’s gaming market
Citizens and Juice Reel’s data shows Florida closed 2024 with the largest offshore handle for legal sports betting markets. In 2024, the Sunshine State posted a $14.5 billion offshore handle. New York closed with the second-highest offshore handle for legal markets at $9.8 billion. Nevada rounded out the top three for offshore handle at $6 billion. North Carolina, which launched legal betting in 2024, had a $4.1 billion offshore handle.
Juice Reel and Citizens analyzed North Carolina’s debut of sports betting with the launch not impacting the online bookie market from a wagering perspective. The debut, along with launches in Ohio and Massachusetts, have seen players migrate from offshore operators to legal sportsbooks with the average handle of offshore bettors declining by roughly 10%.
Citizens also projected Florida to have the third-largest iGaming market in the U.S. if it was a regulated online casino market in 2024. Florida would’ve finished behind New Jersey and Michigan, which closed with the highest iGaming market size in 2024 of $2.4 billion.
Rhode Island stood out in Citizens’ note as a legal market with a single-operator model.
In 2024, the Ocean State saw 28% of legal wagers make up its total percentage of bets placed. Rhode Island was lower than Florida, which reported a 52% legal market handle. New Hampshire had the highest legal handle rate of 81% for single-operator markets.
Illinois tax change impacts offshore wagering
Citizens also takes into consideration how tax rate increases influence betting behavior.
Juice Reel’s data found an increase in offshore betting in Illinois following a tax rate hike on sports betting resulting in operators providing customers with less promotional play.
In the nine months following the tax change in July 2024, data showed that 89% of the wagers placed in the state were with legal operators. By comparison, Illinois saw 94% of its sports wagers placed with licensed sportsbooks during the 12 months prior to the tax hike.
Citizens expects America’s legal market to grow despite the prevalence of offshore wagering. It projects North America’s legal gaming market to reach $60 billion by 2023.
Regulators take exception to offshore operators
Offshore sports betting operators are facing regulatory scrutiny with the Michigan Gaming Control Board (MGCB) issuing a cease and desist order to BetNow.eu last month.
The offshore sports betting and iGaming provider is not approved as a licensed operator by the MGCB but notes on its website that it is licensed and regulated by The Autonomous Island of Anjoun Union of the Comoros. The MGCB declared in a notice that BetNow violates state laws by operating without a license while exposing consumers to risks.
The board determined that BetNow’s operations violate the Lawful Internet Gaming Act, the Michigan Gaming Control and Revenue Act and the Michigan Penal Code.
Offshore online casinos and sweepstakes are also receiving backlash from regulators with agencies in Colorado, Delaware, Mississippi, Nevada and West Virginia also taking action by sending cease and desist letters that order the shuttering of illicit operations.
