Illegal and offshore sports betting continues to thrive even with the legal version in some stage of implementation in 30 American jurisdictions, according to a report just released by the United Nations Office on Drugs and Crime.
The handle: Between $340 billion and $1.7 trillion, according to the report. By contrast, legal markets accounted for around $40 billion in 2020. About $2.3 billion was reported in the United States during that span.
As could be expected from the source of the report, much of that dark market activity is reportedly being run by organized crime groups and money-laundering operations. Ominously, the report supports the predictions of Holy Cross economics professor Victor Matheson and others that cryptocurrency has created “a reliable and almost untraceable international money transfer mechanism.” The implementation of crypto has been a much-discussed topic among casino executives as tender such as Bitcoin becomes more ubiquitous in the American economy. The report also cites “the use of innovative types of bets, the proliferation of online gambling …” as complicating the policing of illegal gambling.
“The threat posed to sports by illegal betting is amplified by the increasing amount of money-laundering that is associated with this illicit activity. Estimates about the scale and scope of illegal betting vary, with some estimating that up to $140 billion is laundered through sports betting every year …”
What does the UN report suggest to combat illegal gambling?
The report lays out an interesting dissection of legal, gray and black betting markets, noting the difficulty in policing an Internet-connected world. One conclusion is likely not to be welcomed by state-level regulators and politicians who rue federal involvement in the gambling industry but lament the lingering impact of the Wire Act.
“The licencing system for gambling entities that operate globally on the Internet lends itself to abuse by unlicenced operators, which claim to be licenced by a jurisdiction. This situation illustrates why the regulation of Internet-based gambling requires a cross-State approach in order to be effective. With so many online betting operators taking bets in multiple jurisdictions, it is increasingly difficult to determine which are legal and which are not, except from the narrow position of whether the operator is licenced in the jurisdiction where the point of sale takes place.”