U.S. Sports Bettors Need More Education
July 27, 2020
In recent months, it has been difficult to take the pulse of American based sports bettors. This has largely been due to their inactivity brought on by the COVID19 pandemic. With major U.S. sports leagues (MLB, NHL, NBA & NFL) ready to return to action, now is a good time to review the sports betting industry in America.
To date, twenty-two states and the District of Columbia are offering sports betting or have already passed legislation to legalize such activities. With only a dozen states taking bets to date, the industry has already accounted for more than $22 billion in sports betting revenue since May of 2018. At an average state tax rate of 9%, that's more than $200 million that has gone into state offers.
While these numbers might seem impressive, there are indications that U.S. sports bettors are still betting with illegal bookies or offshore sportsbooks. It's easy to understand why that is happening with sports gamblers who live in states where sports betting is not yet available. However, it's also happening in states where gamblers have "legal" alternatives.
Part of the problem is that only a few states have legalized online sports betting activities. Anyone who doesn't live close to a casino that takes bets is still choosing to bet through other sources because of convenience. The rest of the problem seems to be an educational problem.
In a survey done by the American Gaming Association, illegal sports betting has only decreased by 25% in states with legal options. Still, demand is growing.
In a news release, Bill Miller, president, and CEO of the AGA stated: “We’ve known for a long time that Americans like to bet on sports. This research affirms their interest in moving toward the protections of the legal market. Giving consumers convenient alternatives to the illegal market, like regulated mobile offerings and competitive odds, is key for getting bettors to switch to legal channels.”
What the report indicated, which is troubling, is that 55% of the people gambling with offshore bookmakers believe it is completely legal to do so. That's only true if credit /debit cards and wire transfers are not used to fund accounts.
According to Miller, two things need to happen. First, the time has come for more states to legalize sports betting (retail and online) and stop letting tax dollars go abroad. Second, the industry needs to do a better job of marketing the positives of sports betting domestically and the actual pitfalls of gambling illegally or offshore.