GeoComply Data Shows Bans on Offshore Sportsbooks are Working

It doesn’t look like the nationwide crackdown on offshore sportsbooks will be stopping anytime soon.

A new report from GeoComply shows that bans on offshore sportsbooks have been leading more bettors to join the regulated US market. This confirms that the bans have a significant impact, despite the limited legal recourse available to states. 

The geolocation data focused on sports betting markets in Arizona, Louisiana, Massachusetts, Michigan, Tennessee, Iowa, Indiana, Kentucky, North Carolina, and Virginia. All ten markets are similar in size, but the first five states have driven offshore sportsbook operators out. Those states saw an average uptick in new sportsbook signups of almost 40% when compared to the five that have not taken action.

GeoComply’s report is bad news for offshore operators, who continue to operate in many US markets. It is expected to result in a new wave of bans in other states, ending the “grey market” where these operators had been thriving.

The American Gaming Association estimates that around 33% of US wagers placed in the US are from offshore sportsbooks. That number is way down compared to other years, and should drop even further once more states decide to crack down on illegal operators.

Will Offshore Operators Push Back?

The vast majority of offshore sportsbooks have complied with orders to exit specific US markets. While few have publicly responded, they have shut down their platforms in order to meet the state’s deadlines. With more states likely to pass bans of their own, many are wondering if operators will continue to comply.

While states have been ordering operators to exit their markets, they don’t actually have the legal authority to do so. Since these operators are based overseas, only the federal government has the authority to file lawsuits against them. That would be bad news for an operator, but action is far from guaranteed. 

A large workload and complicated international laws could require years of work, which the government may not be willing to do.