Problems At Offshore Sportsbooks Underscore Need For MA Law

Stability complaints are on the rise from users of Bovada, a leading offshore sportsbook. These complaints range from site crashes to freezes to losses of bets and funds. Technical issues at offshore sportsbooks can highlight the need for legal sports betting in Massachusetts.

Lawmakers in Massachusetts seem close to passing a sports betting bill, which would offer more protection to gamblers in the state.

Offshore websites like isitdownrightnow.com have also shown a spike in instances of the site being down. These inconsistencies occurred mainly in the last week of May.

Confusion hurts MA sports bettors

Uncertainty over the legal status of online sportsbooks represents the biggest threat to Massachusetts bettors. The American Gaming Association (AGA) conducted a study in 2019-2020. It found that  74% of bettors believe it is “important to use legal sportsbooks.” However, 55% of those bettors currently use offshore books but “believe they are betting legally.”

“The sites which are not overseen by any state gaming regulatory body and do not pay US taxes have confused American consumers,” said Howard Stutz of the Nevada Independent.

Few restraints limit offshore sportsbooks and the way they target bettors through ads. A site such as Bovada might look similar to a legal site when perusing the main page. The bettor would see no language anywhere that their accounts and funds are not protected. Only when site outages and technical problems arise do the bettors see their money is exposed.

Offshore sportsbooks keep increasing in number, furthering the confusion. Moreover, their facades appear legit, but on the back end, their services offer little to bettors in the way of protections.

For example, Bovada offers a self-exclusion link. It is a basic safeguard for bettors looking to curb their activity. But the linked page on Bovada provides minimal support. 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.”

No contact information nor links to the appropriate site coordinators are offered. One click off the main page, and consumers are left to fend for themselves.

The argument for regulation

Congress passed The Professional and Amateur Sports Protection ACT (PASPA) in 1992 to limit legal sports betting to a small handful of states. The act aimed to protect consumers from the scourge of gambling.

However, as Eric Meer of the UNLV Gaming Law Journal noted, “PASPA supports a shadow economy of illegal sports gambling providers.” This is the reason the Supreme Court struck it down in 2018. Unfortunately, the shadow economy remained in the form of offshore sportsbooks.

The AGA previously estimated the offshore industry to be worth $150 billion annually. In the cases where major gambling states, such as Massachusetts, fail to legalize gaming, the offshore industry only grows.

By not having to pay any taxes and requiring no regulations to open their sites, these books are increasing in number at a much faster rate than legal sportsbooks. Competitive regulated sites are the best solution to this competitive advantage for illegal offshore sportsbooks.

What protections should bettors expect?

Continued technical issues at offshore sportsbooks highlight the need for legal sports betting in Massachusetts.

The AGA recently sent a letter to US Attorney General Merrick Garland. In it, it argued for prosecution of illegal offshore sportsbooks. The letter also highlighted key protections that all gamblers should expect from a legal market. These include:

• Testing machines to ensure fair play and payouts
• Regulations that ensure age verification
• Security of personal and financial data
• Consistency of slot-, wheel-, and drum-based games
• Setting of fair odds based on official data
• Inclusion of responsible gaming services, like self-exclusion lists and max-bet caps

While some illegal offshore sites may occasionally offer responsible gambling services, this is done more to keep up appearances than anything. It’s in this unstable offshore landscape that 52% of all bettors operate.

Boston-based DraftKings throws weight behind AGA

Boston-based DraftKings is one of the major legal online sportsbooks pushing for regulation. Griffin Finan, vice president of governmental affairs, has argued that “eradicating the illegal market and bringing customers onto a legal, regulated platform must be a top priority for the industry.”

The legal gaming industry is more than a $200 billion industry that has generated nearly two million jobs. The costs to the states that fail to regulate the industry are twofold to Finan.

“Customers are left unprotected but states are also losing out on significant tax dollars.”

The need for education on offshore betting

In its study, the AGA determined that of those bettors using offshore books, 46% would rather use legal options. Many of these people are not even sure the books they’re using are legal or not.

More consumer education on the risks of illegal sportsbooks needs to be a priority in Massachusetts. The recent issues of Bovada and others proves this. Finan summed it up.

“Illegal sports betting is happening on a massive scale, and it’s in everyone’s best interest to bring it into the sunlight, regulate it and tax it.”