Before May of 2018, the only legal sportsbooks in the United States were all located in the state of Nevada which has opened up for online sportsbooks like BetMGM and William Hill. Sports betting was considered to be illegal in this country according to the federal government with the exception of that lone grandfathered state.
The actual reality of the situation was a totally different story. Private bookies have been taking sports bets all across the US for hundreds of years. Over the past few decades, offshore sportsbooks operating in legal jurisdictions such as Panama and Antigua started catering to the US market.
Federal laws at the time were geared towards wire transfers for the purpose of gambling, not towards US citizens placing sports bets with a bookie or online.
That all changed two years ago when a landmark decision by the US Supreme Court turned the jurisdiction of sports betting over to individual states as opposed to the federal government.
New Jersey led the fight for state rights in that case of New Jersey online sports betting. It quickly became the first state outside of Nevada to offer legal sports betting tied to in-state casinos and horse racing tracks where bettors could bet on horse racing.
By definition, a legal US sportsbook pertains to betting venues located in the 20 states that have legalized sports betting within their borders. Recent legislation makes this number fluid with more and more states joining the ranks as time goes by.
One of the biggest reasons why the majority of US bettors still turn to offshore sportsbooks to place their bets is betting variety. Another reason is convenience. You could also add competitive odds to the list.
The offshore books have a 20-year plus edge on the emerging legal US sports betting industry. They also have a competitive edge through fewer regulations and much lower taxes than their US counterparts.
This gap will continue to close in time. This is especially true once more states start offering sports betting online. New Jersey has led the charge in that category as well. The Garden State is well on its way towards leading the nation in both the total sports betting handle and revenue and sportsbooks such as Fox Bet and Borgata are thriving.
One of the most interesting results of legal sports betting in the US is a big jump in revenue at offshore books in states where it is still illegal to place sports bets. The increase in those states at offshore books was almost 25 percent. The corresponding loss in states where legal sportsbooks operated was also around 25 percent.
As the availability of in-state sports betting increases at both land-based and online sportsbooks, offshore books will continue to lose market share in the US. For now, they remain the primary way the entire US sports betting population books their daily and weekly action.