The proliferation of sports betting in America has reached an all-time high. However, despite the booming industry of legal sports wagering, illegal offshore bookmakers continue to dominate the sports betting landscape. This unsettling revelation emerged from a recent study focusing on the men’s and women’s NCAA March Madness tournaments of 2024, revealing that these unlicensed betting platforms outstripped their legitimate counterparts in dealings related to this mega sporting event.
In an attempt to understand the dynamics of the market, the Campaign for Fairer Gambling (CFG) entrusted YieldSec, a respected analytics firm, with the task of surveying bettors who wagered on the high-stakes college basketball tournaments. The aim was to measure the foothold of the legal industry in the realm of sports betting in the pivotal year of 2024.
YieldSec’s findings were eye-opening. A staggering $4.3 billion was wagered on the college basketball postseason games via unregulated online platforms, which is equivalent to more than 61% of the total stakes. This figure starkly contrasted with the projection by the American Gaming Association (AGA), the body representing America’s legal gaming industry, which had predicted that legalized sportsbooks would handle over $2.7 billion in wagers during March Madness.
At the helm of CFG is the gambling aficionado Derek Webb. As an industry veteran, he perceives the unabated proliferation of online sports betting as a source of potential harm related to gambling. He leads CFG on its mission to drive bipartisan gaming reforms and enhance consumer protections. Alongside, campaigning for federal supervision of online sports gambling sits atop their agenda.
The YieldSec study uncovered unsettling facts about the reach of offshore sports betting operations during March Madness 2024. Observing the online ecosystem, they found that over 378 virtual sportsbooks aggressively targeted American bettors, and a mind-boggling 650 affiliated websites endorsed illicit sports betting platforms. In addition, social media platforms were inundated with advertisements from these offshore enterprises. In fact, an alarming 80% of video content related to March Madness distributed across platforms like X, Facebook, TikTok, and Instagram was linked to these illegal operators.
Webb argues that the onus now falls upon the federal government to erect firmer barriers against such damaging entities. He asserts that the lack of a unified government approach and state-level oversight has only served to exacerbate the problem, leading to the proliferation of platforms with questionable integrity.
Last year, the U.S. Department of Justice reassured the AGA that curbing illicit offshore betting was high on their priority list. Megan Bennett, an intergovernmental liaison with the DOJ, stated that the department was diligently investigating and prosecuting instances of illegal internet gambling. She reiterated that the issue of illegal gambling was taken very seriously.
However, the findings of YieldSec suggest alternative realities. Despite these assurances, hundreds of rogue online sportsbooks, offering no player-protection guarantees, managed to infiltrate the market during the March Madness window.
Aside from offering no assurance of payouts or any tax-related benefits, offshore sportsbooks often turn a blind eye towards responsible gambling. A case in point is the scandal involving Ippei Mizuhara, the former interpreter of Shohei Ohtani, the Los Angeles Dodgers’ superstar. As per federal authorities, Mizuhara is accused of swindling over $16 million from Ohtani, which he allegedly lost in sports betting. Mizuhara purportedly placed 19,000 bets averaging at about $12,800, culminating in a whopping loss of nearly $41 million. However, the Department of Justice clarified that Ohtani was a victim and didn’t partake in the illicit betting.
As the narrative of law enforcement agencies and betting patterns evolve, this dramatic intersection of sports and gambling continues to portray not just the changing landscape, but also the urgent need for a stronger regulatory mechanism.
