Illegal Bookies Outperform Legal Ones Industry

Illegal Sportsbooks Fared Better Than Legal Ones During March Madness

By Amelia Walker Senior Content Writer Updated: 22 April 2024

Amelia Walker Senior Content Writer

Amelia Walker is a Senior Content Writer at Betting.US. She has a law degree and deep knowledge of the gambling laws in the United States. Her mission is to keep players informed about responsible gambling, while her passion for sports helps her create useful guides. Amelia has over a decade of experience in betting, which has positioned her as a trusted voice among our readers.

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It has been reported that illegal sportsbooks in the US fared better than legal ones during March Madness this year. Despite the expansion of legal sports betting across the United States, findings from a study on the 2024 men’s and women’s NCAA March Madness tournaments revealed that illegal offshore sportsbooks dominated the action compared to regulated operators.

Commissioned by the Campaign for Fairer Gambling, data analytics firm YieldSec conducted a survey among bettors who engaged in wagering on the men’s and women’s tournaments.

The investigation found that unlicensed online sports betting platforms and applications generated around $4.3 billion in bets, making up more than 61 percent of the total handle on the men’s and women’s postseason games. In contrast, the American Gaming Association’s pre-tournament projection for legal sportsbooks anticipated around $2.7 billion in wagers.

What the Data Showed About March Madness Betting

YieldSec’s research revealed the presence of at least 378 online sportsbooks actively targeting the U.S. market during the March Madness period. Also, over 650 affiliate websites were found promoting illegal sports betting platforms.

Derek Webb from the CFG stressed the need for increased intervention from the federal government to prevent unauthorized operators from accessing consumers. He said many bettors may unknowingly engage with platforms lacking any player protection. He said:

The lack of a united government approach and lax oversight by states have only compounded the problem, enabling entities with dubious backgrounds to operate freely. It’s high time for U.S. leadership to spearhead a unified solution to this pervasive issue.

Data showed that popular social media platforms such as X, Facebook, TikTok, and Instagram were inundated with advertisements from offshore bookies, with nearly 80 percent of March Madness-related video content linked to illegal operators.

Recent Scandal Regarding Rogue Operators

A recent scandal regarding the actions of Ippei Mizuhara, the former interpreter of Los Angeles Dodgers superstar Shohei Ohtani, highlighted the dangers associated with rogue offshore sportsbooks.

Federal authorities alleged that Mizuhara embezzled over $16 million from Ohtani to gamble on sports through an illegal sportsbook. Mizuhara is said to have placed approximately 19,000 bets between December 2021 and January 2024, averaging $12,800 per bet. Despite his extensive betting activity, the Justice Department found no evidence implicating Ohtani in the illegal gambling scheme.

Offshore sportsbooks have become a huge problem in many states that offer legal sports betting. Many states believed that legalizing sports betting would reduce the issue dramatically, but it remains a huge problem.

Illegal sportsbooks present a range of problems, such as evading taxes, offering no assurance of player deposits’ safety or payout guarantees, and avoiding responsible gambling practices. However, many people are unaware that the sportsbook they are using is unregulated and illegal.

The U.S. Department of Justice has said that it is committed to dealing with illegal offshore gaming in the United States. However, many officials claim that the continued presence of this type of betting during key sporting events like March Madness proves that there is still a huge amount to be done regarding these challenges.