More Bettors Turn To Legal Sports Betting

A recent survey on gambling consumer behavior has shown that more US bettors are turning away from illegal sports betting to wager with legal bookmakers. The shift has been attributed to a growing number of legal options across the country, along with an increase in consumer confidence with licensed bookmakers.

AT&T Stadium field before game with cheerleader on screen.

A recent survey by the American Gaming Association reports that betting with illegal sportsbooks is on the decline as more states create a legal sports betting market. ©skeeze/Pixabay

Among the major findings on sports betting consumer behavior, 12 percent of bettors in states with legal sports betting increased their spending with online legal bets. Additionally, there was a 25 percent decrease in spending with illegal bookmakers, although there was a 3 percent increase in illegal offshore operators spending.

For the study, research firm Heart + Mind Strategies surveyed 3,451 American adults for the American Gaming Association (AGA). The AGA acts as a representative for the $261 billion US casino industry and is often involved in high-level activism for gaming education, expansion, and responsibility.

There were a number of key factors attributed to the migration of bettors from the illegal market to the legal market, including:

  • 25 percent of respondents reported more confidence that bets would be paid out
  • 20 percent reported a newfound awareness of casino options
  • 19 percent preferred using a regulated product over a unlicensed one
  • 19 percent were convinced by promotional, free-to-play options by licensed operators
  • 19 percent were convinced by the news regarding legal sports betting in their state

The responses highlighted the need for states to both provide competitive products to offshore bookmakers as well as increasing education and awareness of their products. For states looking to create a legal market, the convenience of offering a mobile sport betting platform is also extremely important.

One major obstacle for sports betting operators to overcome is clearing bettor confusion about which betting sites are legal and which are illegal. The vast majority of sports bettors want to bet with legal providers, with 74 percent saying it’s important to only use legal sportsbooks.

Despite this figure, 52 percent of bettors had used illegal sportsbooks. When made aware of their illegal use, 84 percent of these bettors were surprised to learn that the websites were illegal. In order to tackle the problem, the survey recommends three solutions.

First, consumers need to be educated with what is and is not legal, as 48 percent of surveyed illegal bettors said they would change bookmakers after learning of its illegality. Secondly, give consumers access to the legal market. Thirdly, the benefits of the legal market must be communicated to consumers.

The AGA Tackles the Illegal Sports Betting Market

In order to tackle the use of illegal betting sites, the AGA has been on a campaign to educate the media and consumers on offshore bookmakers. In essence, offshore sportsbooks are websites based in foreign countries that accept bets from US players, whether or not sports betting is legal in their state.

For one, AGA President and CEO Bill Miller stressed that the media need to stop making reference to illegal betting sites with the term “offshore” without clarification of their illegality. Without clarification, Miller stresses that the term legitimizes the illegal market without suggestion of its predatory practices.

In turn, many customers either do not realize that betting with these sites is illegal, or they do not realize that they have no player protection guarantees with these sites. In fact, many of the kinds of bets on these sites are illegal, and extend beyond simple wagers on sports.

The AGA, which previously came out in support of small casinos during the coronavirus pandemic, has said that illegal operators used the sports closure period to exploit customers by offering these betting options. These included offering odds on things such as the weather or shark migration patterns.

Previously, the AGA estimated the illegal sports betting market in the USA to be around $150 billion a year. Since PASPA opened the gates to legal sports betting in 2018, 18 states plus DC now offer legal sports betting. It’s expected that four more states will join the legal market this year, with others considering changing their markets to allow mobile wagering.

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