The legal landscape around gambling in the U.S. has undergone some serious shifts over the years. Offshore sportsbooks have played a big role in this journey, and there’s even been tension between the regulated market and the offshore world.
This case study looks at something that’s often overlooked: the fact that offshore sites have kept the conversation alive and, in many ways, pushed the regulated industry forward.
The Wild, Wild West of Online Gambling In The Early Days
Before we get into the present, let’s take a quick stroll through the past. You see, the early days were a bit like the Wild West—lawmakers were scrambling to figure out how to handle this new world of online gambling. And guess what? Offshore sportsbooks were the pioneers.
The 90s
Online gambling exploded in the mid-90s.
Back in 1994, Antigua and Barbuda passed the Free Trade & Processing Zone Act, creating a framework for online casinos and sportsbooks to operate. By the late 90s, Americans were flocking to these offshore online betting sites.
The United States had a whole new arena to navigate, and naturally, lawmakers weren’t too thrilled about the idea of Americans betting through offshore sites. Jon Kyl introduced a senate bill to stop online gambling in 1997 and Bob Goodlatte did similar in VA shortly after. They didn’t pass.
Early 2000s
Fast-forward to 2001, and Antigua and Barbuda online gambling industry was booming, pulling in a massive $2.4 billion in revenue.
Efforts like the Unlawful Internet Gambling Enforcement Act (UIGEA) in 2006 were meant to clamp down on these operators. Offshore sites found a way around them, kept operating, and Americans kept betting offshore.
2011 Was A Big Year
In April of 2011, PokerStars, Full Tilt Poker, and Absolute Poker were caught disguising transactions to get around UIGEA, which led to a massive crackdown known as Black Friday.
But then later that very same year, the DOJ clarified that the Wire Act only applies to sports betting. Even though states would be slow to regulate, this opens the flood gates for states to regulate poker and casinos, but boxes out sportsbooks like Kareem Abdul Jabbar in his prime.
Offshore Sites Pushing the Envelopes Behind the Scenes
So, sports betting is doomed, right? Or is it? Here’s where things get interesting.
Offshore sportsbooks didn’t just persist through the 2000s—they became a key part of the gambling landscape. States were handcuffed while international books essentially scoffed at U.S. regulators and laughed on their way to the bank with big bags of lost state revenue opportunities in tow.
As well soon see, this eventually sets the stage for the massive growth we’ve seen in U.S. sports betting.
US Sports Betting Boom and Offshore Persistence
Now, we’re at the dawn of modern sports betting regulation. A 2018 Supreme Court ruling in Murphy v. NCAA.
This was a game-changer for U.S. sports betting. The Court struck down PASPA, the law that had banned sports betting outside of Nevada. States can finally legalize online sports betting as they see fit.
U.S. States can finally compete with the offshore sites that have been taking their revenue. New Jersey led the charge, and by 2024, 38 states (plus D.C.) had legal sports betting.
Modern Day Gold Rush (2018-2024)
Annual betting handles and revenues have surged each year. Americans wagered a record $93.2 billion legally on sports in 2022, which jumped to $147.9 billion in 2024 (a 23% jump from the previous year). Sportsbook revenues correspondingly grew from about $7–8 billion in 2022 to $13.7 billion in 2024
Continued Use of Offshore Books
But even with this expansion of legal options, offshore sportsbooks still haven’t disappeared. In fact, they continue to be a big part of the market. By 2018, when states had the option to start playing the game, many of the top offshore books had been established in the industry for nearly two decades.
A 2022 study showed that U.S. bettors were still wagering about $64 billion annually through offshore sites, which accounts for around 40% of the market. Why? Because these sportsbooks offer competitive odds, promotions, and sometimes even more variety than their regulated counterparts can provide.
Offshore Markets Are Keeping the Pressure on U.S. Regulators
So now, let’s talk about the role offshore sportsbooks have played in shaping U.S. gambling laws. For years, they’ve been a thorn in the side of regulators, but not in the way you might think.
The continued presence of offshore sites has kept the conversation about regulation alive and moving. It’s forced lawmakers to rethink the status quo and made them realize that the “grey market” won’t just disappear—it has to be dealt with head-on.
Recent Legislation Proposals
In 2023, a group of state gaming regulators even teamed up to urge the DOJ to crack down on offshore sportsbooks, with a focus on consumer protection and tax revenue. It was a bold move, one that signaled a growing recognition that these sites are here to stay unless the legal market can offer something better.
That’s just one example of how offshore sportsbooks have been driving the narrative about improving the regulated industry. But it’s not all about enforcement.
Offshore sportsbooks have also highlighted the gaps in the legal market. Without them, would U.S. states have moved as quickly to legalize sports betting? Hard to say. The offshore sites have been filling a void for years, and they’ve pushed states to create better, more competitive options for American bettors.
Two Markets Battling to Be The Best – The Bettor’s Dilemma
Here’s the thing: the top offshore sportsbooks offer solid value. They can provide more generous odds, in part, because they don’t have the same overhead costs that U.S.-regulated sportsbooks do.
They don’t have to worry about paying hefty taxes or following strict consumer protection laws, which allows them to offer more attractive betting options. But let’s be real—while those odds may look appealing, there’s a trade-off.
Offshore Trade Off
The downside? Well, there’s the risk that some shady offshore sportsbooks, especially lesser-known unregulated ones, might not always pay up if you hit a big win. Plus, if you’re betting in a state where gambling isn’t legalized, you’re technically stepping into murky waters.
It’s not ideal, but for many, the appeal of better odds and more betting markets outweighs the risk. Even just new places to shop for lines draw in thousands of new accounts.
Living That Regulated Life
On the flip side, legal sportsbooks are highly regulated, offering a sense of security. They have to follow strict consumer protection rules, like age verification and anti-money laundering checks. They also contribute to the economy by paying taxes, which in turn fund public services.
So, you’ve got a choice—do you go for a site with better odds and almost three decades under its belt, or do you bet at one of your few options in the regulated space? For many, the regulated option is still off the table based on their location alone.
The Economic Impact of Offshore Betting
Here’s where the rubber really hits the road. According to the American Gaming Association (AGA), Americans are betting over $510 billion annually outside of the regulated US market.
Lost Tax Revenues
In 2022 alone, U.S. bettors wagered around $63.8 billion through offshore sportsbooks. If you’re doing the math, that’s a lot of revenue that goes untaxed.
While the legal market has certainly been growing—U.S. sportsbooks generated around $13.7 billion in revenue in 2024—offshore betting still represents a significant portion of the market.
States are missing out on hundreds of millions of dollars in tax revenue, while the legal industry is facing competition from these untaxed operators.
| Category | Legal U.S. Market (2022) | Offshore/Illegal Market (2022) | Estimated Annual Tax Loss (State & Local) |
|---|---|---|---|
| Sports Betting (total bets handled) | ~$100 billion in wagers | ~$63.8 billion in wagers (≈40% of market) | ~$0.7 billion (lost taxes on offshore handle) |
| Online Casino & Poker (gross revenue) | ~$5 billion GGR (in 6 legal states) | ~$13.5 billion GGR (nearly 3× the legal market) | ~$3.9 billion (lost taxes from offshore iGaming) |
Is There A Silver Lining?
Of course, the loss of taxes is not ideal, but you could argue that offshore sportsbooks are helping to highlight just how much potential there is for a legal market.
As states continue to legalize and refine their regulations, they hope that more bettors will make the shift toward legal platforms. And with more legal sportsbooks, the economic impact could be massive—both in terms of U.S. revenue and jobs.
The Path Forward: Can Offshore Sites Coexist with Legal Betting?
So, where does this leave us? Offshore sportsbooks aren’t going anywhere anytime soon, and frankly, that’s not a bad thing.
They’ve forced regulators to take a hard look at the industry and rethink the rules. They’ve kept the conversation going and made sure that the legal market has to evolve to stay competitive.
I like the offshore books personally, and I always emphasize the importance of playing at trusted sites. But for all their benefits, offshore sportsbooks do come with risks. There’s always a bad actor out there, operating without regulation trying to scam players.
It’s important for bettors to weigh the pros and cons. And if you’re new to the game, don’t hesitate to check out legal options in your state—these platforms are regulated and offer a level of consumer protection that offshore sites can’t always match.
What do you think? Do you prefer the appeal of offshore sites, or do you stick with legal platforms for the added security? Let me know in the comments, and let’s keep the conversation going!
About the Author
Alonzo Solano
The Boss of Betting, Editor-in-Chief & Sports Analyst
Alonzo Solano is an author, sports analyst, Editor in Chief of BossofBetting.com, and host of the 'NFL Latino TV' podcast.
Outside of family, his biggest passion is NFL football. Perhaps he is best known for his podcast 'NFL Latino TV,' where he shares his analysis and perspectives on the game with a worldwide Spanish-speaking audience.
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