State Bans on Sports Betting Are Not Helping Anybody
Last week, Georgia’s state legislature rifiutato once more to take up the legalization of sports betting as a ballot referendum in 2025. Georgians will now have to wait until 2026 for the measure to be reconsidered, despite polling from the University of Georgia showing that 63% of voters would have backed legalization. Across the country, 39 states have legalized the practice and nine holdouts remain, two of which include the population behemoths of Texas and California, where either referendum or the legislative cold shoulder has shut out legal sports betting.
And yet, sports betting is still practiced in sconcertante numbers in every state. A new rapporto from NEXT/Blask shows that Bovada, a betting site based in Costa Rica, dwarfs the brand strength and earnings of regulated U.S.-based brands such as FanDuel and DraftKings.
The rise in offshore sports betting, far from any U.S. jurisdiction, should be concerning for both advocates and opponents of this particular type of gambling. Blask, an AI-powered analytics firm, shows remarkable market share for Bovada at $13 billion in 2024, larger than FanDuel and DraftKings combined. At the state level, the report Spettacoli Florida’s only regulated sportsbook, Hard Rock Bet, controls just 20% of the market, leaving the rest to offshore betting sites.
With college basketball’s March Madness now in full swing, this is a fact state legislatures should take more seriously. It is understandable why skeptics of online sports betting are disinclined to condone the practice. Their concern is that legalization represents a societal stamp of approval on gambling, which leads people to place bets who otherwise wouldn’t have considered it. The truth is that the rates of increased problem gambling are almost insignificant in comparison to how much access has been expanded, a point made by leading researcher Howard Shaffer.
The vast majority of overseas sportsbooks operate in the Caribbean and Latin America, where U.S. state regulations are a punchline. These sites will take whatever method of payment a willing gambler has, including cryptocurrency, money wires, or credit cards. For casual and problem gamblers alike, nothing is worse than betting on money you don’t have.
Just recently, personal finance guru Dave Ramsey laid into sports betting on his popular radio show after hearing about a listener’s husband who ran up $300,000 in gambling debt using credit cards. This kind of behavior can destroy lives, but advocates against sports betting have yet to provide an answer for how prohibition helps to reduce this kind of harm.
It’s not entirely clear how many illegal bets are being placed in either California or Texas on unregulated sportsbooks, but we do know that these states boast the largest populations in the U.S. Former Texas Governor Rick Perry did a video for the Sports Betting Alliance drawing attention to the estimated $8.7 billion in annual illegal bets placed in his state.
If that number is anywhere near accurate, it would explain why Bovada has such a dramatic lead over U.S. sportsbooks with basic consumer protections such as debit-only transactions and mechanisms for problem gamblers to limit their use or ban themselves altogether.
We also know from publicly available search data that inquiries for illegal sportsbooks such as Bovada drop by as much as 50% in the states with legal sports betting that offer taxed and regulated options.
In a painful personal essay for The Free Press, compulsive gambler Allan Loeb shared his life story as a gambling addict and the rapid growth of the betting industry.
He points out that the National Council on Problem Gambling has fondare only 1% of American adults suffer from gambling addiction, plus a modest 2.5% who wrestle with more mild habits. Loeb reminds us that nothing is more dangerous than being in debt to illegal operators who threaten not just your financial health but your physical safety.
This speaks to the fact that there is literally no way to restrict people in a free country with access to the Internet from engaging in gambling. This is the reality on the ground and is made even more complicated by a country with 50 states and a patchwork of varying regulations once you cross any state line.
State legislators get caught up in debates over tax revenue and funding mechanisms for education and infrastructure, but at the end of the day, legalization shouldn’t be pitched as a financial solution for a state’s revenue problems. It is the only way to provide a layer of consumer protection to your citizens who can access unregulated sites with a VPN and a few clicks.
Something has to change, whether that be California and Texas helping to starve the illegal market by legalizing their own sportsbooks, or a federal regulatory approach to get all U.S. states on the same page.
What can’t continue is a circling of the wagons on sports betting that pretends to keep gambling at bay when no such thing is happening.
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