Massachusetts Regulators Encourage Crackdown on Offshore Sports Betting Sites

Massachusetts regulators have joined a growing group of watchdogs nationwide that are encouraging the federal government to protect users from offshore betting sites.

“I think that the goal should be zero—zero bad actors in the regulated market,” Massachusetts Gaming Commission (MGC) Commissioner Jordan Maynard said during a meeting Tuesday.

The meeting comes a few months after Massachusetts legalized retail sports betting on January 31 and less than three months after it launched online sports betting on March 10. Members that were present during the meeting unanimously voted to send a letter that asked for an investigation of offshore sites to U.S. Attorney General Merrick Garland.

Offshore betting sites exist within a gray area in laws. The sportsbooks are often not licensed to conduct business in any American state, meaning that customers are without basic protections and guarantees they would receive from any licensed business.

There are also no federal laws that target bettors that use offshore betting sites, though the books themselves are illegal. Many states also have local laws preventing the use of offshore sportsbooks, and any state that does not have a legal sports betting market is also off-limits—at least, it is supposed to be—for offshore sportsbooks.

“Offshore sportsbooks violate federal and state laws in targeting U.S.-based consumers” and “take advantage of confusion and uncertainty to entice consumers to use their illegal sites,” according to the American Gaming Association (AGA).

Concern over the prevalence of these sites has been growing nationally as uninformed bettors see these sites as attractive alternatives to traditional books such as FanDuel DraftKings, and others, often because of their odds and array of markets. Gamblers in states where sports betting is legal can also be tricked into thinking it is fine if they use offshore sites.

“Illegal, offshore gambling operators are not held to these same standards by any regulatory authority, and often take advantage of the legalized landscape in jurisdictions such as Massachusetts to attract customers to their products,” reads the MGC’s letter. “[We are] asking that the Department of Justice and your colleagues in the federal government prioritize investigation of these offshore sites.”

States have had trouble kicking the influence of offshore sites. Critics in the 13 states that have not adopted sports betting legislation also frequently cite the prevalence of illegal operators as reason not to advance with a market.

“The dangers posed by these unlawful operations are well known, including a lack of investment in Responsible Gaming programs, loss of state tax revenue that funds important initiatives, no age verification requirements to protect minors, no controls to prevent money laundering, an absence of guarantees that customers will receive fair payouts, and much more,” the MGC saint in its letter.

As the ongoing fight over offshore sites continues, Massachusetts is enjoying a fruitful start to its stint as a home for . A couple of weeks ago it was reported that the state was ahead of schedule and was on pace to collect $22 million in tax revenue in just a couple of months.

The sports betting industry also racked up a betting handle of $568 million during March, the first month with , which provided 96% of all transactions.

Inspired by the success of nearby markets in New York, New Jersey, and Pennsylvania, Massachusetts is another domino that has fallen in a nearly-unanimous Northeast betting scene. Only Vermont of all states north of South Carolina and east of Minnesota does not have sports betting available for residents and travelers.

Massachusetts has run into several potholes, whether it be debates over what should be offered in their catalog of events or the terms for promotions, but the market is operating well, and the MGC’s commitment to improving it further means that it should continue to produce.