Legal vs Illegal Sportsbooks: Spotting the Difference
As the sports betting boom continues to roll across the United States, there are undoubtedly thousands upon thousands of prospective customers ready to jump in and participate.
By now, just about half the states have a form of legalized, single-event wagering. Several more states are on the verge of passing legislation that would open the door, while the rest can clearly see the revenues available – and likely will aggressively explore the option in years to come.
So, for those thousands of people looking for answers, here are some basic comparisons and information to unclutter the perception of the industry.
First, find out whether your state offers legal sports betting.
As of March 3, 2021, some form of sports betting is legal in Washington D.C. along with the following states:
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- Rhode Island
- West Virginia
How to Identify the Legal way to Bet
Your state has easily accessible guidelines for setting up an account with the approved operators.
Here’s a simplified blueprint for setting up an account:
- Select an online bookmaker from the menu of those allowed in your state.
- At the site, click on the button to begin the process. Usually it’s labeled “join” or “open account.”
- Register with the selected bookmaker and fill out all the details requested. Pay close attention to the accuracy, especially when you enter your personal details.
- A good feature for legal, regulated gambling is the ability, via each bookmaker, to set your own gambling limits.
- Make sure to have the necessary personal identification so you are able to verify when asked. You won’t be able to make a deposit or place any wagers unless your ID has been verified.
- Now, you’re able to make a deposit and place a bet. Since most first-time registrations include the option of a sign-up bonus, read the fine print before taking advantage of any offer to “click” and apply.
- You can set up your preferences to ensure a comfortable view each time you visit the site.
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The Offshore Market
The biggest difference between legal bookmakers and offshore (illegal) versions is regulation.
You’re safer under the regulations but you also are dealing with operators who are subject to taxes.
Offshore, unregulated online sportsbooks offer certain advantages but they aren’t the right choice if you have access to legal books in your state.
The main danger is not being caught and arrested because you have an offshore account; it’s the tricky trust factor in depositing and withdrawing your money. You’re never really sure because these sites are not regulated.
If you live in a state where you can bet on sports online, you should always choose one of the many reputable sportsbooks operating in the United States.
Recommendations for those who live in states without legalized sports betting include “don’t gamble,” “go offshore” and “find a local bookie.”
Of course, if you choose either of the latter two you will be running the risk of breaking the law.
Though it’s largely seen as unlikely, the federal government could pursue litigation against an offshore book. That’s trouble for customers, who might lose their balance with the book and would be basically unable to fight it.
Here are a few of the more recognizable offshore gambling sites: Betonline, Bovada, Mybookie and YouWager.
The Challenge of Licensing for Legal Sportsbooks
Every operator needs gaming licenses. These run the gamut, state by state, from Class B definitions such as restaurants and bars all the way to tribal casino regulations.
State operators identify the modes of online and in-app gaming, along with brick-and-mortar locations, and apply for those licenses needed.
Examples of licenses that must be obtained prior to opening:
- An operating license
- A personal functional license
- A personal management license
- A premises license
And that’s just the tip of the iceberg, because operators aiming to provide remote gambling online or any other facility and plan to advertise in other countries will need to get authority from their specific Gambling Commission.
Here’s one example: Colorado.
On May 1, 2020, FanDuel Sportsbook, DraftKings Sportsbook, BetMGM, and BetRivers all went live at the same time. PointsBet, William Hill, WynnBET, BetAmerica, Betfred, theScore, and Barstool Sportsbook have all since entered the Colorado market as well.
Each of Colorado’s 33 commercial and tribal casinos are eligible to apply for online and retail sports betting licenses. Most of them have applied for and obtained at least temporary licenses.
The Differences Between Legal and Illegal Operators
The state operators are regulated and subject to taxes; not so with illegal bookmakers. That’s a big advantage to be exploited – so long as the illegal operators aren’t arrested and charged.
The legal books can follow through on “guaranteed” payouts. The consumer is protected because of the gaming regulations. The offshore variety can “guarantee” just about anything but is not ultimately held accountable. Big difference.
Variety of wagering options is improving for regulated bookmaking operators, but it’s not close to the wide-ranging options offered by illegal operators. regulated operators must have their markets approved by regulators where offshores can offer anything they like. This is why you won’t see betting markets available at legal books for events like presidential election anytime soon.
Regulated sportsbooks are safe and your money is secure. But if you step into unregulated waters, you’re likely to find challenging banking methods and fees that come with depositing and withdrawing. Withdrawal methods are generally restricted to checks, bank wires and cryptocurrencies.
Not surprising: It’s easy to make no-fees-charged deposits but not so easy to withdraw funds, given almost all offshore sportsbooks require withdrawal fees and withdrawal minimums if you are withdrawing your money via a non-cryptocurrency method. It’s not uncommon to see a $50 fee for withdrawing winnings.
Depending on your appetite for risk, the legal vs. illegal decision is easy to research and come to a conclusion.
What does “offshore” mean in sports betting?
An offshore sportsbook is a betting operator that conducts business and collects revenue outside of the laws of the United States
How do I know if a sportsbook is legal?
A sportsbook operator that is officially licensed will have a clearly presented declaration (usually in the website footer) stating that it is authorized to conduct business within the laws of a certain geo location.
Is it illegal to use offshore sportsbooks?
The short and answer is yes. While it is very unlikely you’ll be prosecuted for using an offshore sportsbook in a recreational capacity, it is technical illegal. It’s sort of like going a few miles per hour over the posted speed limit.