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Combatting Illegal Sportsbooks Online Betting

Major Sportsbooks Want to Get Bettors Away from Unregulated Market

By Blake Roberts Founder & Editor in Chief Updated: 15 November 2023

Blake Roberts Founder & Editor in Chief

Blake Roberts is the founder of Betting.US and is currently heading the creative team as Editor in Chief. Born and raised in Morgantown, West Virginia, Blake is a great sports fan, with football and basketball being his favorite. He’s our trusted voice for all betting-related matters.

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For many years, illegal sports betting has been a huge problem in many states around the nation. While a lot of states have legalized sports betting in some form or another over the past few years, illegal and unregulated betting continues to be an issue.

However, the interest in illegal sports betting varies from state to state, and it is something that two major players in the industry are keen to address.

According to recent reports, sports betting industry giants, FanDuel and DraftKings, are focusing on the considerable number of bettors currently wagering through unregulated channels. At the Global Gaming Expo (G2E) held in Las Vegas, the CEOs of both companies highlighted the untapped potential of this market and their initiatives to redirect these bettors to regulated platforms.

Combatting Illegal Sportsbooks a Huge Challenge

DraftKings CEO Jason Robins said that this was a huge challenge, adding that most bets in the U.S. are still placed illegally. He said:

Still most money in the US is being wagered illegally. Our initial focus is how do we bring people in from the illegal market and create the experience that they want. It’s already there, it already exists, it’s already betting on these products.

Moderator Contessa Brewer referenced a report by the American Gaming Association, which estimated that Americans wager over $500 billion yearly via unregulated betting avenues. This huge figure means a massive loss in potential tax revenue of around $13.3 billion a year, which could be allocated toward state funds.

Despite being the biggest players when it comes to the legal U.S. sports betting market, FanDuel and DraftKings face hurdles even in states that have legalized betting. Offshore and unregulated betting sites often result in stiffer competition due to their accessibility and established user bases.

Significant Number of Searches for Illegal Sportsbooks

At present, neither FanDuel nor DraftKings operates in California, Texas, or Florida, which are the three most populated states in the country. FanDuel CEO Amy Howe referred to Google statistics that showed approximately 50 percent of sports betting-related searches nationwide are for illegal sites.

The figures are higher in California and Texas, where the lack of regulated options sees 80 percent of searches directed toward illegal sites. On the other hand, in states where there is a solid legal framework for sports betting and legal sportsbooks, such as New Jersey and Pennsylvania, only 20 percent of searches are for unregulated operators.

The drive to divert bettors from unregulated betting to regulated platforms is not just about increasing market share, according to industry officials. It is also a move to safeguard bettors from unscrupulous operators and practices, as well as to protect state interests and finances.

Legalizing sports betting in unregulated states means a vital opportunity for sports betting companies to broaden their reach and for states to reclaim billions in potential tax revenue. It also means that sports fans can benefit from greater protection and peace of mind, as they can place their bets through operators that are fully regulated.