Legal sports betting is growing in regulated markets and taking customers away from illegal bookies, according to the American Gaming Association.
New research conducted on American sports betting habits by the AGA showed a 25% decrease in customer spending with unregulated bookmakers and a 12% increase in online and mobile wagering in states where it’s legal to do so. Sports betters said confidence that wagers will paid out (25%), an awareness of legal options (20%) and a desire to use a regulated book (19%) were the biggest factors in shifting their money away from the illegal market.
“We’ve known for a long time that Americans like to bet on sports. This research affirms their interest in moving toward the protections of the legal market,” said Bill Miller, AGA president and CEO, in a statement Tuesday along with the report’s release. “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.”
The AGA said the research suggests that sports bettors “overwhelmingly” prefer legal operators, with 74% of respondents stating they believe it was important to only place wagers with a regulated bookmaker.
However, the survey also showed an increase in offshore betting with illegal operators. Even in states with legal sports betting, offshore spending increased 3%, according to the research. Last year, 52% of all sports bettors in America placed a wager with an illegal offshore operator.
The AGA said the study found that illegal sports betting is driven largely by confusion about online operators, as 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,” Miller said. “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.”
Since the U.S. Supreme Court overturned the Professional and Amateur Sports Protection Act, or PASPA, in 2018, 17 states and the District of Columbia have legalized and regulated sports betting. Nevada permitted sports betting prior to PASPA being struck down.
According to the AGA, Americans have legally wagered more than $22 billion on sports nationwide since the Supreme Court overturned PASPA, generating more than $198 million in tax revenue to state and local governments. Before the COVID-19 shutdown of casino operations nationwide, 2020 looked set to become another record-breaking year with $3.5 billion legally wagered in January and February, up from $1.9 billion the same time last year, the AGA said.
Heart + Mind Strategies conducted this survey on behalf of the AGA between December 2019 and January 2020. The survey includes 3,451 interviews among American adults over 21-years-old of various subgroups.