Analysis: Why Offshore Sportsbooks Are Thriving Despite Regulated Competition

Brad Allen, LegalSportsReport

Upward trend for offshore sportsbooks?

Benjie Cherniak, investor and former MD of Don Best, said his impression is that business was booming.

“When PASPA was repealed, there was concern about how long they had, but business has never been better,” Cherniak said.

The stats appear to back this up. Google search data for the year-to-date shows Bovada is the most-searched brand among US-facing books at a 19% share. DraftKings is a relatively distant second at 11%, with FanDuel at 9%.

Likewise, Similarweb data shows an upward trend for Bovada in the last six months compared to FanDuel. There is also an upward showing for offshore books like sportsbetting.ag and BetOnline.

Some of this is noise. Sources suggest there is “click bait” low-quality traffic in those numbers. However, there is also genuine growth in the offshore world.

“The offshore market has taken off like a rocket since PASPA,” said one Caribbean-based bookmaker who asked not to be named.

Customer confusion between legal and illegal

Brand confusion accounts for some of the issue.

“The most important thing is that customers still have difficulties telling which bookmaker is licensed and which is not,” said Manuel Stan, Kindred US senior vice president.

Penn CEO Jay Snowden said similar last year.

“A lot of people just don’t know,” Snowden told analysts.

Offshores cause the problem

Some of that is deliberate subterfuge from offshore books. But the media also has a role to play. 

To use one example from a regulated state, The Denver Post has a page titled “Best gaming apps for real money gambling” that directs to Bovada and offshore casinos.

“Media overall is doing too little to separate the good from the bad,” Stan said.

It is worth remembering too that sports betting is already part of mainstream sports coverage. MLB hosts sports betting shows on MLB.com. The NFL has hatful of official betting partners for the 2021 season.

But around 60% of US customers do not have access to legal betting options. They naturally turn to whatever sportsbooks they can find.

Rest is here…