Posted on: February 26, 2024, 06:58h.
Last updated on: February 26, 2024, 06:59h.
Reports of the death of the US-facing online gambling black market have been greatly exaggerated. At least, that’s the takeaway from new research commissioned by the Campaign for Fairer Gambling (CFG), a UK campaign group that promotes gambling reform.
Of the estimated $5.37 billion Americans wagered online on this year’s Super Bowl, just $1.4 billion was bet legally, according to the research conducted by Yield Sec. The analytics firm posits that 350.5 million online bets were placed by Americans on the game, 65 percent of which, or 228.2 million, were on illegal platforms.
That means the black market took a greater share than last year, according to the study. In 2023, the Super Bowl generated 286 million online bets, split between 186 million black-market bets and 100 million legal bets.
So Why Is It Taylor Swift’s Fault?
Black market operators are able to offer the kind of novelty prop bets (exotics) that regulated US market operators can’t. That’s because the latter are generally required by law to stick to sports.
So, the gains by the black market this year could, at least in part, be attributable to the Swiftmania that surrounded the Super Bowl, along with all those offshore betting markets on how many times the singer would appear on camera during the live broadcast.
Black market operators were offering an array of such bets. But in the regulated markets, “Swifties” had to content themselves with betting on their hero’s boyfriend, Kansas City Chiefs tight end Travis Kelce, to score the first touchdown. Sure enough, in the lead up to the game, DraftKings reported this was the most popular bet among its customers.
Back to Black
The idea that regulated online betting weakens black market gambling, both live and online, has been a key argument for states that have legalized sports wagering since the federal prohibition (PASPA) was lifted in 2018.
CFG, which is skeptical of the benefits of regulated online gambling, suggests the Yield Sec research shows this argument has been overstated.
Substitution from illegals to legals is simply not happening at the pace it should – illegals are used as brands of choice and convenience, with some substitution to legals for offers and account-opening incentives, when available, as with the Super Bowl,” states the report.
Unburdened by taxation, regulation and rigorous security checks, black-market operators often offer more competitive odds, bonuses, and promotions, although they come with fewer customer protections.
They also “prey on Americans, undermine problem gambling efforts, and steal tax dollars from states and local governments,” according to the American Gaming Association (AGA), the Washington D.C.-based advocacy group for the regulated gambling industry.
