Super Bowl Betting Dominated by Offshore Sportsbooks, Says Report

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Super Bowl LVIII’s historic debut for the big game in Las Vegas attracted massive interest for sporting and cultural reasons. That led to innumerable headlines and legal sports betting records falling across the country. A casual observer could be forgiven for forgetting offshore sportsbooks still exist.

But exist they do, and in fact, they still dominate the market.

A recent report from “technical intelligence platform” Yield Sec says that not only has grey-area online sports betting not gone away in the age of legalization, but these operators remain far more popular than regulated betting.

The Colorado-based firm says that $5.37 billion was wagered on the Super Bowl overall. Of which, just $1.7 billion was wagered at regulated U.S. sportsbooks.

In the celebrity sphere, popstar Drake bet $1 million at offshore cryptocurrency sportsbook, despite being in Las Vegas for the big game. Taylor Swift-related prop bets remained off the table in legal sports betting states. But offshore bookies jumped on the bandwagon at top speed.

77 or 33

According to an American Gaming Association report from 2023, 77% of online sports bets last year were placed at regulated ‘books.

That contrasts with this new study from Yield Sec. It said the opposite was true for Super Bowl LVII, and that only around one third of bets on the big game were placed at legal operators – with the other 70% of the handle at offshore ‘books.

So, which is true? There’s honestly little way to know for certain. Offshore gambling operators aren’t usually in the business of publishing their yearly financials.

Super Bowl betting also creates a unique moment, as more casual bettors enter the market for some one- off wagers. That was heightened this year by the intense interest in the big game’s storylines and the Taylor Swift effect.

Offshore sportsbooks also operate as professionally as the regulated ones, advertising on social media just as much, and often times, offering better odds. So much so, a newcomer to the market might not even know the difference, and a veteran player might see the value change.

“Many of the kids we talk to don’t distinguish between the legal and the illegal market. They don’t even know,” said Keith Whyte, executive director of the National Council on Problem Gambling, or NCPG, speaking to The Guardian newspaper.

“It’s absolutely crazy to expect any consumer, much less a young consumer, to figure out these incredibly fine distinctions.”

Denting Revenues

U.S. gambling had a bumper year in 2023. The American Gaming Association’s talk around the market is that growth in legal sports betting takes away from unregulated operators that have less safeguards for customers and don’t pay any U.S. taxes.

However, just how much this is true is hard to quantify. This latest report says just one-third of the offshore sportsbook’s football betting market has been hit in the five years since sports betting legalization began.

And that’s assuming that all legal sportsbook customers were previously or potential offshore customers without legalization.

John Holden, an Oklahoma State University associate professor specializing in gambling legislation, said that even if only one third of bettors have shifted to the legal side, then that’s a good return so far.

He also added that legal sportsbooks could increase the rate of conversion by offering better odds and petitioning for a wider range of bets across legal markets. If they don’t keep up, new casual bettors could become more serious over time, and look to the offshores for extra value.

“There is the risk that bettors are being trained to bet in the regulated market and then will turn to unregulated,” Holden said.

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