Study: Sports Betting Regulations Can Have Adverse Effects, Drive Consumers Offshore
According to a recent study, laws intended to safeguard athletes from sports betting may have unfavorable effects and push bettors to offshore bookmakers.
A research was recently commissioned by the International Betting Integrity Association (IBIA) in Belgium to ascertain how legislators unintentionally influence a market and encourage behavior that they intended to restrict through rules. H2 Gambling Capital, an English data intelligence company, carried out the IBIA investigation with a focus on the world gambling market.
Based on the review, the paper "The Availability of Sports Betting Products: An Economic and Integrity Analysis" makes a number of important assumptions. One noteworthy finding made by researchers is that when regulators forbid a particular type of wager, it frequently leads to gamblers looking for similar choices in unregulated markets.
“The central finding of the study is that alongside other regulatory and economic factors — including taxation and advertising policy — there is a strong correlation between the availability of sports betting products and onshore channeling,” the report’s executive summary read.
Rules Determine Offshore Activities
H2 Gambling claimed to have collected anonymous data from IBIA participants in 12 markets where it is legal to wager on sports. Australia, Brazil, Canada (except from Ontario), Denmark, Germany, Great Britain, Italy, Netherlands, Ontario, Portugal, Spain, and Sweden were among those jurisdictions. Because of the unique regulatory framework that differs from state to state, the US was left out.
Researchers discovered that when a market forbids a particular kind of wager—player props, for instance—bettor want to place such a wager will not go unmet; rather, they will go for a company that will take the bet. In the 38 states where sports betting is legal in the US, almost all of them forbid player props including collegiate athletes.
College athletes who use props, according to NCAA President Charlie Baker, are more likely to face harassment and threats both in person and on social media. But according to IBIA experts, prohibiting those bets actually drives bettors to offshore sportsbooks rather than eliminating such wagers.
"While politically attractive, this study confirms that bet restrictions are a blunt and counterproductive instrument,” said IBIA CEO Khalid Ali. “They don’t prevent betting; they just drive it into the unregulated market where most of the problems with sports integrity arise.”
Baker and proponents of the ban on player props contend that in addition to safeguarding student-athletes, the ban also lessens the possibility of game integrity being jeopardized. Opponents of the bets contend that a rogue bettor looking to gain an advantage could buy off a student-athlete to toss a game by using a player prop.
Increased Onshore Demand and Bets
Researchers came to the conclusion that there is a greater desire for a regulated environment the more betting possibilities a market offers.
H2 Gambling inspectors in Great Britain found that 97% of sports bettors choose to use regulated bookies to place their bets. There are a lot of bets in the UK, including political ones.
“The evidence-based and data-driven analysis in this study shows that sports betting product restrictions adversely impact onshore channeling and that in turn has negative consequences for regulatory oversight and taxable revenues. A market that seeks to maximize the economic impact and social protections achieved via an onshore regulated framework requires a wide sports betting product availability,” the report concluded.
