Posted on: April 12, 2024, 01:19h.
Last updated on: April 12, 2024, 01:19h.
Despite legal sports betting being more widely available in the United States than ever before, a study on the 2024 men’s and women’s NCAA March Madness tournaments concluded that illegal offshore sportsbooks still outpaced regulated books in terms of action.
The Campaign for Fairer Gambling (CFG) commissioned YieldSec, a data analytics firm, to survey bettors who wagered on the collegiate basketball tournaments to gauge how much market share the legal industry gained in 2024.
The probe found that unlicensed online sports betting platforms and apps facilitated an estimated $4.3 billion in bets. That accounted for more than 61% of the overall handle on the men’s and women’s postseason games. The American Gaming Association, which represents the legal gaming industry in the U.S., projected ahead of the 2024 March Madness tournaments that legal sportsbooks would take over $2.7 billion in wagers.
Derek Webb founded and runs CFG. He is a gaming industry veteran who believes the widespread expansion of online sports betting poses elevated risks of gambling-related harms. CFG aims to advance politically bipartisan gaming reforms to increase consumer protections and is advocating for federal oversight of online sports gambling.
More Protections Needed
YieldSec researchers found that at least 378 online sportsbooks actively targeted the U.S. during this year’s March Madness. More than 650 affiliate websites promoted illegal sports betting platforms.
Social media was also flooded with advertisements from offshore bookies. The CFG survey found that almost 80% of the March Madness video content posted on X, Facebook, TikTok, and Instagram was linked to illegal operators.
Webb says the federal government must do more to prevent such bad actors from reaching consumers, many of whom unknowingly bet with a platform that has no little to no player protections.
The lack of a united government approach and lax oversight by states have only compounded the problem, enabling entities with dubious backgrounds to operate freely,” Webb said. “It’s high time for U.S. leadership to spearhead a unified solution to this pervasive issue.”
Last summer, the U.S. Department of Justice assured the AGA that combatting illegal offshore gaming is a priority.
“The Department takes seriously the issue of illegal gambling, including illegal online gambling, and continues to successfully investigate and prosecute illegal internet gambling,” said Megan Bennett, an intergovernmental DOJ liaison.
The YieldSec findings, however, suggest otherwise, as hundreds of online sportsbooks offering consumers no guarantees that a winning bet will be paid reached March Madness bettors this year.
Rogue Books
Along with providing no tax benefit or player guarantees that their deposits are safe and their bets will be paid out, offshore sportsbooks typically care little about responsible gambling. That’s been highlighted by the scandal surrounding Los Angeles Dodgers superstar Shohei Ohtani’s former interpreter.
Federal authorities this week said Ippei Mizuhara allegedly stole more than $16 million from Ohtani to gamble on sports with an illegal bookie. Mizuhara allegedly made 19,000 bets between December 2021 and January 2024 on an average wager of $12,800.
The Justice Department says Mizuhara’s betting ended up losing nearly $41 million. The federal law enforcement agency says it has discovered no evidence that Ohtani participated in the illegal betting.
Mizuhara wired more than $16 million in unauthorized transfers from a checking account belong to an MLB player identified in the affidavit as ‘Victim A,’ who in fact is MLB star Shohei Ohtani. The transfers from this bank account allegedly were made from devices and IP addresses associated with Mizuhara, who served as Ohtani’s translator and de facto manager,” explained U.S. Attorney Martin Estrada.
“I want to emphasize this point: Mr. Ohtani is considered a victim in this case,” Estrada added.
