A black market mystery
Most of the country can now gamble legally on sports. So why are offshore bookmakers still thriving?
BY BRINGING SPORTS BETTING OUT FROM THE SHADOWS, the black market was supposed to go out of business. That was the argument presented to the Supreme Court six years ago, and reiterated by lawmakers across the country in the race to legalize sports wagering and start collecting taxes.
As I report today in The Washington Post, some elements of the illegal offshore sports betting market have indeed been weakened, but others are flourishing. It’s impossible to know exactly how much gambling goes on under the table, but one industry analyst speculated that if about $150 billion is wagered legally on sports every year nationwide, probably another $50 billion or so is bet illegally.
There are compelling reasons to want to stop offshore operators from taking Americans’ bets, as they have over the internet since the 1990s from places like Curaçao, Costa Rica, Panama, and Antigua. Historically, some of those companies have been known to exploit customers in merciless ways—even people they know suffer from gambling problems—then use profits to fund other criminal activity.
The U.S. industry is emphatic about needing favorable treatment in order to compete with the black market: lower taxes, minimal restrictions on advertising, and zero restrictions on how much they can let losing bettors lose and winning bettors win.
Before regulators and policymakers agree to that, it’s important to examine why people continue to bet illegally, especially in any of the 38 states (and D.C.) where sports betting is legal.
I dive into that in my story, with input from some especially knowledgeable people:
As I was reporting this piece, this arrived in the mailbox of a friend in California, where all sports betting is illegal …
A generous new-customer enticement. Former NFL star Michael Vick on the cover. A The pledge of being “America’s Favorite Sportsbook.” It would be easy to confuse this company for a legitimate sportsbook, but it’s one of hundreds of offshore operations that keep finding shady ways of attracting business from Americans. (I didn’t bother to blur out the phone number and URL on this cover, so I’ll just say that I strongly urge you not to go bet there.)
Thank you for reading the story. I’m in Washington, D.C., this week to do book reporting, and my friends the Sullivans asked that in exchange for me staying at their house, their friendly dog, Barnabas, appear in this newsletter alongside Wynnie. Seems fair to me.