How Illegal Sports Betting Is Crippled By Licensed Sportsbooks

Written By Chris Gerlacher on October 28, 2022
Lucky For Life Moves To Daily Drawings

The Massachusetts sports betting launch is on the way, and bettors will soon have plenty of safe and legal gambling options in the state. Creating a legal and regulated market will provide many positives for Massachusetts bettors. A legal sports betting market will provide sportsbooks that are non-threatening, tax-paying, and financially secure.

Avoiding illegal and offshore gambling sites are important for many reasons. They are not licensed by any regulating body, meaning they are unsafe. Your personal information could be in danger, and they could even refuse to pay out winning bets.

Attorney General Press Release

On October 21, the Office of Attorney General Maura Healey published a press release regarding a recent illegal sports betting case in Massachusetts. 

The day before, Lonnie Hillson pled guilty to several crimes linked to illegal sports betting and was sentenced to one year in the House of Corrections with three years of probation running concurrent with his prison sentence. His parents also ran the illegal sports betting operation with him. Hillson was caught after he tried to extort gambling funds from an undercover police officer.   

“The target of this investigation ran a venture that violated numerous laws and profited by driving gamblers further into debt, exacerbating their destructive behavior,” Colonel Christopher Mason, Superintendent of the Massachusetts State Police, said.

Related news: Full List Of Hopeful Massachusetts Sports Betting Operators Announced

Perks Of Legalized Sports Betting 

Creating a legal market for Massachusetts sports betting sets common standards for licensed sportsbooks. In other states, sportsbook operations, financials, and executive teams all undergo scrutiny before a book can get a license. This is about more than keeping customer data private. It’s also about keeping bad actors out of the industry. 

Illegal sports betting operations like the one Hillson ran lack the controls that sports betting licenses impose. The Hillsons’ criminal histories would disqualify them from opening a legal Massachusetts sportsbook.

Illegal sportsbooks also lack the transparency to prove a history of financial stability. That means bettors can’t know for sure whether their winnings will be paid out. An illegal sportsbook could refuse to pay winnings or run out of money due to mismanagement. 

In the case of the Hillson’s operation, an illegal sportsbook could also be shut down by law enforcement. Anyone who placed wagers wouldn’t be able to get their stakes back. No legitimate lawyer would be able to help someone get illegal stakes or winnings. 

Most importantly, sportsbooks won’t intimidate bettors who bet on credit. Bettors can use sportsbook bonuses to wager with site credits earned from real-money play. Sports bettors don’t lend their money in advance to bet at licensed sportsbooks. These two conditions keep bettors from owing sportsbooks money they can’t pay back. (That does not mean that bettors never bankrupt themselves through sports betting.) 

Finally, licensed sportsbooks generate tax revenue. Unlicensed sportsbooks may generate revenue for the founders, but illegal funds aren’t taxed. That’s fewer tax dollars going into the general fund and the various programs Massachusetts plans to fund through sports betting. 

Also read: Underdog Throws Its Hat In The Ring For Sports Betting License

License Requirements Legitimize Legal Sportsbooks   

Besides the financial and operational risks illegal sportsbooks carry, they’re inconvenient. Legal sportsbooks are available at casinos and app stores, which is easier than organizing a meeting with a bookie. No one needs to worry about having a legal app on their phone. It beats accidentally leading police to an illicit sports betting operation.  

Sportsbook license requirements set ground rules that bettors expect good businesses to follow. They entice new bettors to try sports betting and keep bettors from rebelling against the sports betting industry as a whole. (Although, sportsbooks pushing the boundaries on loose advertising restrictions may invite that backlash anyway.)    

It’s important to keep in mind that legal alternatives don’t eliminate illegal sports betting. Unregulated sportsbooks still attract bettors with odds that are too good to be true and bet limits that licensed mobile sportsbooks can’t compete with. 

However, those illegal options lack the safeguards that licensed sportsbooks provide bettors. When legal sportsbooks in Massachusetts finally launch, consumer-friendly sportsbooks will fill the gap that the Hillsons used to fill.  

Chris Gerlacher Avatar
Written by

Chris Gerlacher

Christopher Gerlacher is a lead writer for Play MA. He is a versatile, experienced writer with a portfolio that ranges from political and legislative pieces to sports and sports betting. Gerlacher is a devout Broncos fan, for better or for worse, living in the foothills of Arvada, CO.

View all posts by Chris Gerlacher