LAS VEGAS — Bovada Sportsbook is adhering to cease-and-desist orders from US states for potentially simple reasons: no one had asked before, and no one threatened to punish it.
“I think maybe it’s the first time they’ve ever been asked to cease and desist,” Becky Harris, the former chair of the Nevada Gaming Control Board told Gaming Today. “That would be my sense of it. Somebody finally decided that it was time to send them a formal notice that they didn’t want them operating in their state borders, and they complied.”
West Virginia mid-July became the eighth state to successfully shut out the unregulated Curacao-based sportsbook. Two weeks later Connecticut and the District of Columbia were added to Bovada’s forbidden jurisdictions list.
This followed Michigan and Colorado victories earlier this year.
Bovada also lists Connecticut, Nevada, New Jersey, New York, Maryland, Delaware, Michigan, Colorado, Washington, D.C. and West Virginia on its restricted jurisdictions list. Massachusetts counterparts are exploring a similar move to become the 11th to shut down Bovada.
Cease and Desist Skepticism Early On
There was wide skepticism following Michigan and Colorado’s demands, prompted by years of offshore sites operating beyond the policing power of American authorities. No American has ever been charged for wagering with an offshore site. The few but notable arrests of offshore website executives had occurred when they traveled to the United States. Matt Holt. the CEO of integrity monitor IC360, said times may have changed with licensed operators voicing concerns to regulators.
“Who was chasing them before? Nobody,” Holt told Gaming Today. “Nobody was actually chasing them. We could say that they’re outlaws, but no one was chasing them. Now [state regulators are] under pressure from the licensees: ‘Hey, if you want us to pay $10 million of license fees, somebody has to go out and shut down these illegals. By the way, they’re taking tax revenue off your plate.’
“As a state with regulated betting, you can generate more tax revenues to shut down the illegals and push that market into the regulated space.”
The West Virginia Lottery said upon remitting the cease-and-desist on June 17 that “Any future actions, which could include involvement from the West Virginia Attorney General, will be determined by Bovada’s response.”
States Fighting Harder for Homegrown Dollars
Harris, a panelist at the Sports Entertainment Innovation Conference, agreed that growing domestic expertise in regulating legal gambling — including a realization of the economic impacts of the unregulated kind — is part of the reason behind the successful pushback. The repeal of the Professional and Amateur Sports Protection Act in 2018 made the legalization of sports betting a state decision.
“We’ve had operators now, some who got in early on the ground like New Jersey and West Virginia who have several years under their belt in terms of regulating and seeing what’s going on in the market and wanting to protect the state interests,” Harris said. “We regulate because we want to make sure that there’s a legitimate product, that people are getting paid, that taxes are being collected, the state is being paid.”
Harris said state legislators learned that sports betting revenue could buttress state budgets that proved “a little fragile” during two years of COVID shutdowns.
“This is newfound money for state legislators,” she said. “I think they’re becoming increasingly protective of this income stream.”
Because plenty of it is streaming to the Caribbean, even with sports betting legal and underway in 40 US jurisdictions. Various gambling industry observers peg the offshore market share of US bettors at around 65%. Holt believes the figure is “closer to 50-50 and turning heavily toward the regulated side.”
A Revenue Shift
According to an American Gaming Association study:
- 51% of Americans surveyed use only the legal market
- 34% use legal and illegal
- 15% use illegal only
“They’re always going to have advantages,” Holt said. “Betting anonymously. And credit’s huge. Being able to bet with money you don’t have and because they’re not paying taxes or license fees like the regulated operators are, they get 400 promotions. If you go to any state, if you go to Google and type in ‘sports betting’ at least half of the entries that will come up on that first page will still be illegal operators. So there’s also still an education curve. If I’m an average Joe, I just want to do sports betting if I’ve never done it.
“There’s 31 legal sports books in Colorado. How do I know that some of these aren’t legal? They look the same. Maybe we need some kind of seal on all the sites that shows I’m a licensed, regulated book.”
Today Bovada, Tomorrow the Rest?
Scores of offshore sites offering their wares illegally in the United States have often dodged states’ blocking measures by tweaking their URLs. That may not be an option for Bovada, Harris said.
“They have name-brand recognition. I don’t imagine they’re changing their URL anytime soon,” she said. “But for every Bovada, there’s ten more, maybe a hundred more that have no problem shifting on a dime.”
Those sites will eventually gain the scrutiny of state regulars, too, Harris said. WV Lottery officials confirmed they were investigating other offshore sportsbooks.
“In the meantime, Bovada is the big guy in terms of US-facing for offshore operators,” she said. “You’ve got a bunch of little guys who are content to go after smaller bets, smaller population sizes, and isolated geographical locations. And those are the guys that are not under the microscope. They’re the ones that are hard to find. They’re the ones that are hard to eradicate.”
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