Report: Illegal sites still thriving despite legalized sports betting in the US

[The Buzz]

Despite the repeal of PASPA in 2018 and the legalization of sports betting across the U.S., illegal offshore gambling sites persist and remain easily accessible, according to a Covers.com article.

In fact, in states without legislation, these sites often serve as the primary choice for bettors. In 2023, the total handle for retail and online betting in America exceeded $100 billion. However, during just the first three months of the NFL season, illegal betting sites received 201 million visits, with U.S.-based web traffic.

From the article:

“Anybody who wanted to bet this past weekend, they did, even if they were in Georgia,” said Lindsay Slader, senior vice president of compliance at GeoComply, in reference to the College Football Playoff semifinal games which took place just days prior.

“Just because there’s regulated gambling in the United States of America, doesn’t mean that it isn’t happening. There’s still plenty of options.”

The most popular offshore betting site in the U.S. was Bovada.lv, which led the way with more than 35 million visits in September, a shade more than 40 million in October, and another 40 million in November, according to Slader. MyBookie and BetOnline were other popular options, drawing north of 50 million and 20 million visits, respectively, during the first three months of the NFL season.

Read the article here: https://www.covers.com/industry/ille...ust-jan-6-2024

[bpmee]

Reasonable state gaming taxes and an open mind about affiliate advertisers could actually help reduce the number of people patronizing the illegal sites.

State tax rates vary from around 10% to an absurd 51% in New York and New Hampshire. One of the wealthiest states in the union, operators are either forgoing or leaving New York altogether.

For New York revenue share affiliates, $1000 in NGR means your commission is calculated on $490 minus a provider's "fees" ($1000 - (0.51 tax rate * $1000)). The "fees" vary by provider. Most commonly, you're looking at processing, bonuses, and chargeback costs. However, some will deduct "marketing and admin" costs as well. So in reality, your 25% commission is really figured off about $400-$450 from $1000 NGR.

Ultimately, a New York RS affiliate is looking at about 10% NET commission unless they can negotiate something better than 25%. Good luck unless you're one of the big boys.

What about New York CPAs? They're laugh out loud terrible. The 51% tax rate means providers generously offer between $50-$200 per player. Yes, $50 on the low end. You can make more reselling purses on Amazon.

For now, the legal market is dominated by about 4-5 super affiliates who have also cut advertising deals with major US media. It's also deeply ironic that the affiliates who have done best in the US legal market are based in Europe, right next to Google's P.O. box on the Emerald Isle.

The market share of the illegal sites could be substantially curtailed without a single legal motion. 1) Set state gaming taxes at a reasonable rate 2) Be more welcoming and open to working with affiliates.

One last thought before leaving the soap box.

I traveled through NY a couple years ago. Exiting the subway at Grand Central Station, I noticed the walls were plastered with sports betting advertisements. There were billboards, posters, and lots of TV commercials. In my humble view, such advertising was a complete waste. People aren't looking at subway placards, they're looking at their phones. I hope the industry stakeholders realize this and update their philosophy accordingly.