Offshore sportsbooks have illegally offered online sports betting in the United States for decades, and they have handled untold billions of dollars worth of wagers over that time.

Despite openly flouting US law for years, they continue to operate to this day and are often a topic among policymakers, industry analysts, and everyday bettors. Many old hands in sports betting are intimately familiar with offshore sportsbooks, but for those new to online betting, this page serves as an introduction to one of the most successful black-market industries in modern times.

Offshore Sportsbooks Explained

As the name suggests, offshore sportsbooks operate from outside the US to offer online sports betting to US residents. The early history of offshore sports betting is murky, but the first bookmakers set up shop overseas in the 1980s to take wagers from Americans by telephone.

Offshore sportsbooks began taking wagers over the internet in the 1990s, and Costa Rica emerged as a popular destination for bookmakers for various reasons, including favorable laws. Early bookmakers operated on the premise that because their businesses were legal in their jurisdictions, US law had no jurisdiction over them.

That legal theory when the US government convicted and sentenced an American citizen to 21 months in prison and a $5,000 fine for offering sports betting to US residents in violation of the federal Wire Act.

US authorities lack the jurisdiction to arrest the operators of illegal sports betting sites in locales such as Costa Rica, but that first arrest in 2000 set a precedent. As a result, offshore sports betting operators now face the prospect of jailtime if they ever visit US territory. Even so, many remain undeterred and continue to offer sports betting to Americans contrary to US law.

Why Americans Use Offshore Sportsbooks

The offshore sports betting industry is the result of prohibition. Before the Supreme Court overturned PASPA, Americans in every state except Nevada had no means to bet on sports legally.

The only options in the pre-2018 days were to travel to Nevada, bet with a local bookie, or use an offshore sportsbook. But even with most states legalizing or planning to legalize sports betting, the offshore sportsbook industry continues to do big business for various reasons.

BettingUSA has never endorsed offshore sportsbooks, but if regulators and licensed operators are to successfully funnel consumers away from illegal offshore betting sites, it is paramount to understand why bettors continue to use them.

Convenience And Contentment

Convenience and access still play prominent roles in propping up the offshore sports betting industry today. Many bettors in states without legal online sports betting continue to use offshore sportsbooks rather than travel to the nearest state with legal sports betting.

Additionally, some bettors are content to continue working with the local bookies they’ve known for years. In many cases, local bookies have longtime relationships with bettors, are willing to extend credit, can provide access to mobile wagering, and settle in cash.

Credit And Evading Bans

Even in states with legal online betting, some bettors continue to use offshore sportsbooks for access to credit. In every state with legal sports betting, local laws prohibit operators from extending credit to customers.

The lack of regulation in the offshore world is detrimental to consumer safety, but it offers advantages for certain segments of bettors. Some bettors prefer offshore sportsbooks because the lack of regulation is conducive to:

  • Betting on credit
  • Tax evasion
  • Avoiding bans for bettors who would otherwise be restricted from wagering due to employment conditions such as working for a sports league
  • Ability to wager on prohibited events such as politics

Confusion Between Legal And Illegal Sportsbooks

An American Gaming Association study published in 2020 highlights one of the most significant issues legal sportsbooks face in the regulated US market. A separate Yougov study indicates half of Americans don’t even know if sports betting is legal or not.

Over nearly 3,500 interviews, the AGA study found that about 74% of Americans think it is important to only use legal sportsbooks. However, 52% of bettors use illegal sportsbooks. In follow-up questions, AGA interviewers found that 84% of the bettors who use offshore sportsbooks were “surprised” to learn they are using illegal sports betting sites.

offshore sportsbooks survey

Internet searches for phrases such as “best online sportsbooks” highlight the source of confusion. Many well-written and professional-looking websites make liberal use of the terms “legal” and “licensed” while simultaneously recommending illegal offshore sportsbooks to their readers.

Unless one follows the industry closely, it is impossible to quickly determine which sportsbooks are legal by searching for answers online. Consumer education will improve over time as the US sports betting industry matures, but it remains a significant issue today.

Risks Of Using Offshore Sportsbooks

Offshore sportsbooks operate contrary to US law and in unregulated environments. As a result, they lack critical consumer protection measures such as:

  • Proper safekeeping of customers’ funds
  • Responsible gambling controls
  • Private information security
  • Regulations regarding prompt withdrawals
  • Impartial regulators to ensure fair dispute resolution

Offshore sportsbooks also face the constant threat of government action, which could lead to operators going bankrupt or disappearing with customers’ funds.

Additionally, many states have laws prohibiting bettors from using unauthorized sportsbooks. State officials have declined to take action against customers to date, but bettors nonetheless face the risk of legal action should law enforcement decide to enforce such laws.

Bettors using offshore betting sites also face greater difficulty making deposits and receiving withdrawals since the US enacted the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA). Under the UIGEA, federal law prohibits financial institutions from processing transactions related to illegal sports betting.

As a result, bettors have fewer sportsbook payment options when they use offshore sportsbooks.

Advantages Of Licensed Online Sportsbooks

The advantages of legal betting apps are a near-perfect reflection of the risks posed by offshore sportsbooks. Whereas offshore sportsbooks lack regulation and consumer protection measures, licensed sports betting sites provide many advantages over their unregulated counterparts.

When bettors use licensed betting apps, they receive numerous benefits:

  • Confidence their winning bets will be paid quickly
  • Ability to set responsible gambling controls such as wagering, deposit, and time limits
  • Operators must pass third-party audits for financial and technical security
  • Simple, fast, and inexpensive deposit methods

Alternatives In States Without Legal Online Sports Betting

The risks posed by offshore sportsbooks significantly outweigh any advantages they may offer. As a result, BettingUSA strongly encourages bettors to stick with legal sportsbooks where they live or wait for legislation to regulate online sports betting.

In the meantime, bettors in most states can turn to alternatives that are similar to sports betting but legal. For example, prediction daily fantasy sites such as PrizePicks and Ownersbox provide a means to put money on the line by making predictions on what will happen in upcoming games for instant payouts.

For example, a typical DFS sports prediction contest may ask sports fans whether the starting pitcher will have more than 3.5 strikeouts or which of two NBA players will score the most points. Similarly, a standard PrizePicks game may ask bettors to predict the over/under on a specific athlete’s fantasy point totals.

In both cases, players make predictions, watch sports, and get paid if they’re right. In neither case do players have to build complicated lineups or compete against other players for prizes. All games are simple, played against the house, and feel more like sports betting than daily fantasy.

A Final Note From BettingUSA

ycgts.shop has provided sports betting news and information since 2014, we have NEVER recommended offshore sportsbooks.

From day one, BettingUSA was dedicated to covering the legal US betting industry exclusively, in full compliance with the various state licenses we hold as an authorized marketing services provider to licensed sportsbooks in the USA.

BettingUSA is proud to hold the distinction of being the first-ever 50-state guide to legal betting options for fans nationwide, and we will continue to provide accurate information going forward.

Offshore Betting Sites FAQ

Numerous states have laws that prohibit the act of placing wagers with illegal sportsbooks and bookies. Law enforcement tends to ignore individual bettors, but the legal risk remains. Bettors should stick with licensed operators in their jurisdictions.

Some offshore sportsbooks have better reputations than others, but none are as safe or secure as licensed operators. Bettors who do a little digging will find that even the most well-known sportsbooks have checkered pasts.

Betting with an offshore sportsbook is inherently risky due to the lack of regulation and because bettors have no recourse if they receive unfair treatment.

Offshore sportsbooks have proven resilient, even in the face of most states either passing or considering legislation to legalize sports betting. That said, some offshore sportsbooks will survive, and many will wither and die.

Legal sportsbooks have the home court advantage in the USA. Licensed online sportsbooks can freely advertise their services, partner with professional sports teams and national media organizations, accept common payment methods, and more. These advantages are critical for appealing to most sportsbooks’ target market: recreational bettors.

Additionally, states with legal sports betting are incentivized to crackdown on offshore sportsbooks. Authorities in Delaware, Maryland, New Jersey, Nevada, and New York have successfully pressured operators like Bovada to stop serving customers in those states.

The Michigan Gambling Control Board followed suit in 2024, when it sent a to Bovada for violating multiple state laws on gambling. Arizona, Colorado, Connecticut, Kansas, Louisiana, Ohio, Massachusetts, Pennsylvania, Tennessee, Washington DC, and West Virginia have also joined the list.

On the other hand, offshore sportsbooks can meet certain bettors’ needs in ways that licensed operators can’t match. Unlicensed sports betting sites can offer credit, take bets on restricted markets, offer higher betting limits, and provide anonymity to customers who want to conceal their wagering activity from US regulators.

Plus, offshore betting sites have lower regulatory and licensing-related overhead, which increases their survivability.

All signs point to some offshore sportsbooks remaining viable for the foreseeable future, despite a 2022 Congressional letter requesting a crackdown on illegal betting sites. However, many illegal betting sites will eventually crumble under the pressure they face from US authorities and changing market dynamics.