Numerous technical problems have recently beset Bovada, one of the largest illegal, offshore sportsbooks. These issues have led to site freezes and crashes, and in some cases, loss of bets and funds.
Bovada’s problems underscore the need for legal sports betting in California. These types of problems occur regularly with offshore sportsbooks.
Ballot proposals to legalize California sports betting are coming this November. If passed, Californians would no longer have to turn to illegal, offshore sportsbooks to place wagers on sports events.
How offshore betting hurts California
The greatest current problem California bettors face, in the eyes of the American Gaming Association (AGA), is confusion. In a 2019-2020 study, the AGA found that 74% of bettors think it is “important to use legal sportsbooks.” However, 55% of those bettors currently use offshore books but “believe they are betting legally.”
Offshore sportsbooks operate freely in the US and target bettors through paid advertisements. When the sites face technical problems, which are common, the bettor confronts the sobering truth that their money is unprotected.
The increasing number of offshore sportsbooks in the US market furthers this problem. Without the need to regulate their odds, implement responsible gaming protections, or create functional “self-exclusion lists,” these sites can present a facade.
Looking at Bovada, the site does offer a self-exclusion link, but it goes nowhere. The text reads:
“If you feel you need to take a break, please contact us to have your account disabled. If you feel that you have a gambling problem, please let us know when you contact us so that we can ensure that your account will remain permanently disabled.”
The increasing need for regulation
When the Supreme Court struck down the Professional and Amateur Sports Protection ACT (PASPA) in 2018, they did so because the law had no effect on Americans’ interest to place bets, legally or not. However, what ending PASPA unwittingly did was create an offshore betting industry that the AGA estimated to be worth $150 billion annually.
In the cases where major gambling states fail to legalize gaming, the offshore industry flourishes. By not having to pay any state or federal taxes and requiring no regulation to open the site, these books are increasing in number at a much faster rate than legal sportsbooks. Competitive, regulated sites are the best solution to the unregulated risks of illegal, offshore sportsbooks.
What does regulation look like?
In a recent letter to US Attorney General Merrick Garland, the AGA pressed for the prosecution of illegal sportsbooks. Offshore books, the AGA said, don’t offer games that meet “testing or regulatory standards to ensure fair play and payouts, age-verification, or security of personal and financial data.”
Slot machines and wheel- and drum-based games are tested to ensure consistency in a regulated market. Payouts are guaranteed, and lines are set based on official data.
Further, the AGA alleges that because offshore sportsbooks are not beholden to any oversight, they do not have “any commitment to responsible gaming.” Which include gambling support services, self-exclusion lists or max-bet caps. Some sites offer them, mainly to keep up appearances.
It is this risky industry that currently caters to 52% of all sports bettors in the country.
Effective education clouded by online betting battle
Current political ads in California funded by the Californians for Tribal Sovereignty and Safe Gaming Organization have fought back against legislation on the November ballot allowing for online gambling. These ads emphasize the negative impacts on homeless people and also the broken “promise of sovereignty” with tribal casino groups.
In the AGA study, 46% of bettors using offshore books would rather use legal options. Many are not even sure the books they’re using are legal or not. Creating consumer education about illegal sportsbooks needs to be a priority in California. Bovada’s problems underscore the need for legal sports betting in California. And also the need to educate consumers more about illegal sportsbooks.
However, getting that information to the public conflicts with the competing debates around tribal sovereignty. Both issues hold relevance, and both immediately impact Californians.
