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Even as legal gambling options grow in the United States, offshore and gray-market sites continue to attract players. Despite efforts by many stakeholders—particularly real-money and sweepstakes casinos—to build loyal audiences, players still flock to offshore operators. One 2022 estimate from the American Gaming Association suggested offshore gambling costs “the legal industry $44.2 billion in gaming revenue and state governments $13.2 billion in lost tax revenue.”
While offshore gambling sites often claim to be safe and reputable, the truth is frequently the opposite. Beyond costing the industry billions, they also pose significant risks to players due to their questionable practices and lack of regulation.
No Options, No Rules: Why Offshore Still Wins
There are several reasons why players choose offshore gambling platforms—some more obvious than others. Perhaps the most straightforward: legal options simply aren’t available in every US market. As of now, only seven states—Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, Rhode Island and West Virginia—allow real-money online casinos. Without legal, regulated alternatives, some players turn to what they believe is the next best option: offshore sites.
Another commonly cited reason is privacy and anonymity. Real-money platforms are legally required to collect certain player data—such as age, identity, and location—for regulatory compliance. Offshore sites often collect this information with far less rigor, appealing to players who prioritize privacy.
Offshore casinos also frequently accept cryptocurrency for deposits and withdrawals—an option not available at most US-licensed casinos. Crypto allows for faster payouts and more anonymous transactions, which further increases offshore appeal.
Then, there’s the matter of variety. Since they operate outside US jurisdiction, offshore sites often serve as all-in-one gambling platforms—something that’s typically prohibited for regulated domestic operators. An offshore site might offer:
- International player pools, which dwarf the limited, state-based networks of legal platforms (even with the Multi-State Internet Gaming Agreement).
- A combined suite of products, including casino games, sports betting, poker, race wagering and more—all under one account.
- Markets that are illegal in the United States, such as betting on political elections, award shows or reality TV outcomes.
Add it all up, and offshore casinos can paint an enticing picture. Of course, it’s not all sunshine and daisies. These platforms come with serious risks that players should understand.
From Vanishing Funds to Rigged Games: What Players Risk
Gray-market operators may offer enticing perks, but those benefits come with significant downsides—ranging from unreliable to outright dangerous. Offshore casinos have no legal obligation to remain in operation. They could disappear overnight, taking user data and funds with them. Players in this situation have no legal recourse.
Worse still, many offshore sites enforce predatory terms and conditions. Some charge exorbitant fees for withdrawing winnings or impose impossible playthrough requirements. Others may tamper with games if no reputable third-party audits their software. Without regulatory oversight, there’s no guarantee of fair play.
These sites also typically offer few or no responsible gambling tools, increasing the risk of harm for players struggling with gambling addiction. Licensed US operators, in contrast, are required to offer such safeguards by law.
Customer service is another area where offshore sites fall short. Many US states require casinos to maintain accessible, well-trained support staff. Offshore sites have no such standards, often leaving players with unresponsive or unhelpful service.
In short, offshore casinos lure players with convenience and variety—but they operate without accountability.
How States and Players Can Push Back
Let’s start with the obvious but lofty answer: legalize online casinos. Some states already have, and expanding access to legal platforms could help stem the tide of gray-market use.
That said, nationwide legalization is a bit of a pipedream at the moment. Even in a best-case scenario, online casino legalization remains a state-by-state legislative effort. And even where it’s legal, offshore gambling doesn’t disappear. In 2022, the AGA estimated that 40% of sports betting activity still occurred offshore, despite widespread legalization.
So what’s the real solution?
Education, Enforcement and Trust
Education and awareness are crucial. Studies suggest that many gamblers don’t realize they’re playing on illegal platforms. In states where legal online casinos don’t exist, public information campaigns can help reduce unintentional offshore play. In regulated markets, player education can direct traffic toward licensed platforms.
But the burden doesn’t fall solely on consumers. State regulators should also take action. The Michigan Gaming Control Board (MGCB) offers a strong example. The MGCB regularly issues cease-and-desist letters to offshore operators. On July 30, the board ordered six offshore gambling providers to halt illegal operations targeting Michigan residents.
A combined effort—smarter education and tougher enforcement—can strengthen the legal industry and restore consumer trust. Licensed operators must pass rigorous testing and compliance checks before launching in any US state. They’re held to strict standards and face real consequences for violations.
In fact, when a legal operator is fined for breaking rules, it can actually increase trust: it proves there’s a system of accountability in place—something offshore sites will never offer.
The bottom line
The gambling landscape in the US is still evolving, and we’re still in the very early stages of online casino expansion. While offshore operators continue to thrive, lawmakers, regulators and operators are beginning to catch up. With more public pressure and clearer regulations, states may be more inclined to act—and protect players in the process.
