Offshore Gambling Businesses thrive side-by-side with Legal Onshore Gambling - According to a Recent Publication
In the United States, the legal online gambling market is exploding, accounting for an astonishing 74% of the $90.1 billion industry. That's according to Yield Sec's USA National 2024 report, commissioned by the Campaign for Fairer Gambling (CFG).
This report paints a compelling picture of the modern gambling landscape, shedding light on the competition between licensed platforms and offshore operators. Last year, regulated online gambling revenues grew a whopping 36%, while offshore operators saw an even larger increase of 64%. This digital battleground has 88% of U.S. internet users exposed to offshore gambling content, with these nefarious sites popping up through search engines, social media, apps, and streaming services.
High-profile events like March Madness, the Super Bowl, Copa America, and the Olympics have driven traffic to both licensed and offshore brands, helping them attract new customers. Offshore platforms draw users in with a broader range of offerings, including sports betting, casino products, and even prediction markets like elections and economic forecasts.
Affiliate marketing plays a significant role in boosting the visibility and retention of offshore sites, with over six times more affiliates promoting offshore sites (668) than those peddling legal operators (106).
While the legal side of the gambling world is on a roll, industry insiders are calling for a more comprehensive strategy. Derek Webb, founder of the Campaign for Fairer Gambling, pointed out, "If the U.S continues to legalize internet gambling without a gameplan to tackle the illegal sector, it's an unmitigated disaster." He goes on to contrast the losses in California, where online gambling is illegal, with those in New Jersey, where it's legal - the illegal losses per capita are close to double in California.
Ismail Vali, Founder and CEO of Yield Sec, echoed this concern, emphasizing that, "Illegal gambling is everyone's problem. It's not just gamblers and gambling regulators, but also operators, law enforcement, media companies, social platforms, and governments that need to take action."
In terms of numbers, 917 offshore gambling operators target U.S. users, compared to only 95 licensed ones. Offshore operators generated $67.1 billion in revenue in 2024, while regulated brands accounted for a comparatively smaller $23 billion. These findings suggest that, despite rapid growth in the legal market, offshore activity remains highly active and well-positioned.
With all this buzz, the question remains: will offshore operators ultimately succumb to U.S. regulators, or will the lure of one-stop-shop gambling experiences prove too strong to resist? Only time will tell.
[Newly added insights]The current dynamics between licensed online gambling platforms and offshore operators in the U.S. market involve a complex interplay between legal frameworks, market trends, and strategic maneuvers.
Regulated online gambling in the U.S. is primarily managed at the state level, with sports betting now legal in 36 states. Major players like Bet365, 888 Holdings PLC, and Flutter Entertainment PLC are actively involved in the U.S. market. Offshore operators, while generally viewed as illegal by U.S. authorities, continue to operate in areas where online gambling is not fully regulated. Despite their risks, some users may still opt for offshore platforms due to perceived benefits such as potentially superior odds or offerings not available through licensed operators.
- In contrast to the increasing popularity and growth of regulated online gambling in the US, offshore operators continue to challenge the legal market, generating a staggering $67.1 billion in revenue in 2024 compared to the $23 billion garnered by licensed brands.
- The ongoing competition between licensed platforms and offshore operators is a complex issue, with the former regulated at the state level and the latter operating in unregulated areas, often luring users with perceived benefits like superior odds or offerings not available through licensed operators.
- The Campaign for Fairer Gambling (CFG) has highlighted the need for a comprehensive strategy in the US, as the legalization of internet gambling without a plan to tackle the illegal sector could lead to an unmitigated disaster, as demonstrated by the almost double illegal losses per capita in California compared to New Jersey.
- The technology-driven casino-and-gambling landscape is shifting in the US, with sports events like the Super Bowl and Copa America driving traffic to both licensed and offshore brands and offshore platforms offering a broader range of services, including sports betting, casino products, and prediction markets like elections and economic forecasts.
