The world of regulated gambling has been expanding steadily, especially in the last decade, owing to rapidly advancing technology. More jurisdictions are passing laws to facilitate online casino gaming and sports betting in a bid to protect players and, of course, capture much-needed tax revenues.
However, offshore operators continue to be a thorn in the flesh for governments despite the apparent benefits that legalized gambling promises revenue-wise and to local communities. Like regulated markets, this gambling black market has also been operating for over a decade and has established itself as a force to be reckoned with, generating billions for offshore operators. Despite all the regulations and penalties put forth for violators, the illegal gambling sector is now thriving alongside the legal betting industry.
Why Offshore Online Casinos and Sportsbooks Succeed
The concept of legalized sports betting has been received quite differently in different jurisdictions. In some cases, there has had to be more than one attempt to get legislators or residents to vote for a regulated market.
The main hesitation for most stakeholders has been the effects on the community, but as it turns out, regulation is much better than letting offshore sportsbooks control the industry. But then, given the amount of money that offshore operators bring in every year, there is a high chance that the gaming black market is here to stay. Beyond the enormous profits, some reasons why it may take much longer to control the gambling black market include the following:
- They offer better odds for players
- Have more lucrative promotions and bonuses
- Increased security for players who want to stay anonymous
- Slow uptake of proposed gambling market regulations
- License-related restrictions.
Let’s dig deeper into the points above to understand exactly how they make the offshore gambling market virtually impossible to shut off.
Time is increasingly becoming a valuable commodity in today’s world and everyone, including gamblers, wants to spend as little of it on day-to-day activities. As it turns out, regulated bookmakers always have terms and conditions that must be adhered to for bettors to get the full benefits of being members. This may be considered ‘jumping through hoops’ by some players, pushing them into the black market, which is more flexible.
Better Odds and Lucrative Promos
Since licensed operators have to set aside big chunks of cash for tax and license fees, their counterparts have no such expenses. This affords them the chance to offer players better odds and more generous and frequent bonus promotions. Even professional players have been flocking to unlicensed bookmakers to take advantage of the more considerable player edge. Some of the overheads include high tax rates, which push away bookmakers that may be interested in getting licensed.
Players have accountability in licensed establishments. However, there is also a money trail to be considered, as bettors must provide personal details, including financial information. This may be uncomfortable as some may want to stay anonymous when transacting on gambling sites and venues. Due to KYC protocols in gambling laws, users may consider going for more discreet operators, most of whom are offshore.
Slow Uptake of Proposed Laws
Whenever there has been an attempt to legalize betting, it has taken months or even years of back and forth to agree on what would work. This is not to say that carrying out due diligence on life-changing legislation is a waste of time, but the unregulated market has been running with no hindrances.
Limits to Licensees
Gambling laws always come with caveats, including the number of licensed operators allowed to provide services to residents. In some jurisdictions, for example, it does not just stop at the number but may go further to put restrictions on who should run such establishments. An example is tribal casino exclusivity in the USA and Canada.
Despite some criticisms, experts have argued that regulation puts governments in a better position to mitigate any adverse effects. On the other hand, allowing the gambling black market to run things would prove chaotic and worsen the situation that industry antagonists have been trying to prevent. Besides, most governments always put aside a percentage of the gambling revenue for education and rehabilitation programs to improve community awareness of responsible gambling.
Additionally, for the most part, the devil is in the details of gambling regulations. Some regulatory components are what have kept potential operators from following the necessary steps to obtaining legit licenses to legally provide their services to gamblers in specific regions. The big question that keeps bugging bookmakers, legislators, and bettors is whether offshore sportsbooks will continue to thrive years after several governments have regulated the industry. Of course, practical solutions will be reached if offshore operators and players who prefer going to the unlicensed are seriously included in the conversation going forward.