Legal vs. Offshore Sportsbooks: What’s the Difference?

Sports betting is legal in a growing number of states outside of Nevada, and other states that have yet to legalize the activity appear likely to do so in the coming years.

Despite that, “offshore” sportsbooks — meaning sportsbooks that are licensed or operate from outside of the borders of the United States — are alive and well. And they’ll accept US customers despite it technically being illegal.

However, just because you can find an offshore sportsbook that might take your action doesn’t mean you should.

What is an “offshore” sportsbook?  

As the name implies, offshore sportsbooks operate from locations off the shores of the US. The term can also describe a gambling provider (online sportsbook, casino or poker site) that does business outside the purview of official US gambling authorities and regulatory bodies.

There are offshore sportsbooks that have been in existence for some time, and they’ve established quite a presence online as a result. In general, they claim to operate under a legal gray area. According to them, that makes them able to offer services in any global market they choose. Reality tells a different story.

So, are offshore sportsbooks legal? No, offshore online sportsbooks are NOT licensed to do business in any US state. By extension, there are no protections in place for consumers who choose to play there.

Are legal and regulated sportsbooks better?  

Yes. When a sportsbook is licensed to do business in a state, that means it has gone through an extensive application and vetting process. It’s costly and expensive to do so, which is part of the reason that big companies dominate sports betting.

The top names in legal sports betting — DraftKings Sportsbook, BetMGM Sports, FanDuel Sportsbook, etc. — know what to expect before they launch in a legal state. They also adhere strictly to the rules wherever they operate. 

For bettors, the approval of a state regulatory body lets them know whether a sportsbook is safe. Approved books have protections in place for consumers, including the safeguarding of funds and data. Offshore sportsbooks are under no requirements to offer similar protections.

Legal vs. offshore betting sites: What’s the difference?

First, there are similarities between onshore and offshore sports betting sites. In both spots, you can bet on sports in a number of ways at varying sports odds. When it comes to differences, the list is much longer:

• Funding options at legal and regulated sportsbooks are of the standard and generally accepted variety — bank transfers, PayPal, etc. Offshore sites may require the use of cryptocurrencies or e-wallets that you’ve never heard of before.
• There are strict rules on what you can bet on at legal books. That means, for the most part, that they stick to sports. Over in offshore land, you can bet on non-sports elements (for example, the national anthem length at the Super Bowl), entertainment-related fare and other things that don’t pass muster in the US.
• If you run into a dispute with a legal sportsbook or have trouble receiving your winnings, you have a clear path toward resolution. That’s not the case with offshore sites, as there are no authorities to turn to, and customer service can be nonexistent.

These are just a few of the biggest differences to be aware of, but one overriding fact should be at the top of the list: legal and regulated sportsbooks are safe options, while you have no such guarantee about offshore books.

Risks of betting at offshore sportsbooks

OK, so you’ve come across an offshore gambling site that actually looks pretty good. You dig in a little bit and see a few good reviews here and there. Is it really that big of a deal for you to try it out? Let’s briefly forget about the legality issue and just weigh the issue at hand and potential trouble spots:

• If you win a bet and the sportsbook doesn’t pay, even after you inquire about it, what do you do?
• Say you try to make a withdrawal, but you never receive your money. Now what?
• If there are no deposit limits in place, you can just shoot for the moon and hope for the best. Good deal, right?

For bettors, there are few or no protections in place when they take their business offshore. This goes beyond the safety of your funds, which should be more than enough of an eye-opener, but also into the area of responsible gambling.

Sure, it’s on the individual bettors to manage their own play at legal online sportsbooks, but what about for the folks who have a legitimate problem with gambling? Legal sportsbooks must have protections in place, including the option to self-exclude or close an account.

Back to the financial side, what happens if the site just simply disappears with your funds? If you think that’ll never happen, think again. You can learn about some of the biggest offshore scandals and their impact on bettors over the years here.

Warning signs you’re dealing with an illegal betting site

If you stumble across an offshore sportsbook in your travels on the web or social media, the best advice is to turn around and move along. But what about when you come across a site that looks pretty good and you’re not sure about its legality? Keep an eye out for the following red flags:

Red-flag warning signs of offshore sportsbooks

• A web address that doesn’t end in .com. Examples include .ag and .lv.
• Home offices in smaller international jurisdictions, such as Antigua, Costa Rica or Panama.
• A bonus or promotional offer that seems to be too good to be true. (Pro tip: It likely is.)
• Fees for processing deposits or withdrawals, and/or unusual payment methods.
• Ability to bet on things that you normally can’t wager on in the US (elections, etc.).

After you see enough offshore or shady sportsbooks, you begin to get a sense of which books are legit or not. In the interim, gambling regulators in individual states where sports betting is legal generally have a list of legal sportsbooks in that state.

Benefits of sticking with legal and safe online sportsbooks

So betting with offshore sportsbooks is clearly a bad idea. What do you have to gain by sticking with legal and regulated sportsbooks? Here are some of the top benefits:

• Top-notch operations. Legal sportsbooks invest heavily in tech. You’ll generally have a choice of some high-level websites and mobile sportsbook apps with features like in-app live streaming.
• You’ll get paid if you win, and your funds will be safe. A legal sportsbook isn’t going to shaft you. If you happen to have a dispute that you can’t resolve with customer service, you have places to turn for help.
• The little things. You’ll have access to customer service representatives, helpful resources, a range of banking options and more. The little things can add up when it comes to betting.

In addition to all of the above, legal sports betting continues to grow. It’s highly competitive as a result, which is fantastic news for consumers. Sportsbooks can’t rest on their laurels, so regular improvement is pretty standard.

Where should you bet on sports online?  

You should take your business to legal and regulated sportsbooks, and that’s it. Offshore books just aren’t worth the risk, and the differences in the overall experience of using the two options are basically night and day.

When you stick to regulated online sportsbooks, you have protections in place, which translate into peace of mind. By extension, you’ll be able to enjoy sports betting for what it is without worrying about issues that might pop up for users of offshore sportsbooks.