Rebuck, Legal Industry Working to Thwart Offshore Bookmakers

Rebuck, Legal Industry Working to Thwart Offshore Bookmakers

The U.S. Supreme Court’s decision to repeal the Professional and Amateur Sports Protection Act on May 14, 2018, has changed the American sports betting landscape.

As we hit the one-year anniversary, looks at the impact of PASPA’s repeal, where sports betting stands in America and what the future holds.

SECAUCUS, N.J. – David Rebuck is trying. He has been trying. The director of the New Jersey Division of Gaming Enforcement has overseen the implementation of what he deems “platinum-standard” guidelines for companies attempting to acquire gambling licenses within his state's borders.

But Rebuck understands his limitations beyond those lines. So he has deputized affiliates, warns he will soon become more aggressive with his department’s policing powers in curtailing the money that illegal and unregulated websites pull far beyond the Atlantic City surf.

Just as certain as Rebuck can be about every dollar wagered legally in his state, he remains unsure how much the opening of a legal and incredibly fruitful sports betting market is affecting offshore sites.

“I think we're cannibalizing the offshore market. I think they are so big that it really is a small impact on them because they're nationwide,” Rebuck told

Offshore Market Has Reach, Appeal, Headstart

The American Gaming Association estimates that around $150 billion is wagered illegally each year in the United States. Reports detailing micro-level activity has been part of many state house deliberations since the repeal of the Professional and Amateur Sports Protection Act of 1992 last May. Legalize sports betting, say advocates, keep dollars in-state and tax them.

Only states with unencumbered mobile markets would figure to have a chance. Nevada and New Jersey are the only states where legal online betting is underway, but states such as Tennessee and Indiana have passed laws to follow suit.

“It is as fundamental as it gets. It’s like oxygen,” Group Plc founder Charles Gillespie said of mobile wagering as a wedge. “Nothing will be recovered from the offshore market without a first-class mobile product. It’s not only about just having mobile, it’s about having good mobile products. So many people, to me – regulators and legislators – just don’t get how serious the offshore product is. It's really good.

“They've been doing this a long time. Their payment processing is more reliable than the regulated onshore guys. The product offering is more complete. It’s faster and has more options. The idea that someone is going to kind of schlep to some sort of lottery-controlled monopoly and bet in a retail location with terrible odds that they have to physically transport themselves to do all this, it’s just a nonstarter.

“Will they have some turnover? Will it generate some tax revenue? Sure. It won’t be zero but it will be just an insignificantly small amount compared to what would be possible with a proper mobile product.”

With most of the offshore sports books targeting the United States legal in their locations – often the Caribbean – confusion remains among casual bettors or neophytes about whether they’re committing a crime. A main fear or annoyance for them is the inability to reliably deposit or withdraw funds because of laws such as the Unlawful Internet Gambling Enforcement Act.

But offshore betting companies operate with impunity beyond the limitations of American state tax rates and licensing fees for official copyrights, producing alluring websites with competitive lines and pricing. And despite the constant risk to American consumers of fraud, consumer trust grows with each successful transaction, Sportech director of sports book Victor Bigio told

“If you go onto (an offshore) website and if you are a player at one of these black market sites, if you make your deposit and make your bet and when you hit withdraw, you get your money, you've already created a relationship of trust with that site.”

Another critical factor is offshore bookmakers and neighborhood bookies offering credit lines instead of requiring money to be posted to accounts. So-called pay-per-head systems have also created an environment of convenience and anonymity that will remain alluring to different players for different reasons. This could become less of an obstacle, if, as many industry stakeholders believe, millennial bettors enter the legal market because they have no experience offshore.

“We know that you're not going to convert everybody to a legal market because bookies can offer credit and things that we can't do. So, some of the market will continue to work with bookies,” Monmouth Park CEO Dennis Drazin told “I think some people don't want their action tracked, so not all of it's going to move over.

“But a significant amount of the revenue, maybe 50 to 60 percent, should ultimately end up in legal hands. And the better we can make efforts through our regulatory bodies in this country to crack down on the offshore sites and bookies, the better the numbers we'll look at."

Legal Stakeholders Skeptical Illegal Bookmakers Are Doomed

Industry stakeholders differ on what degree offshore markets can be impacted until sports betting is legal nationally. The Supreme Court repeal of the Professional and Amateur Sports Protection Act on May 14, 2018 was actually good for offshore business. A half-listening public, believing sports betting is universally legal, is susceptible to whatever a subsequent Google search yields regarding making a first bet.

Bigio thinks that “over the short term, unfortunately the excitement about regulated sports betting is actually going to increase the business for many of these sports books.”

“It’s about education,” he said. “One of the things like I try to stress to everybody who I speak to at conferences or any of our current clients or anyone who's speaking directly to legislators, is sports betting being legal in the United States is very exciting. “However, people have to remember that billions of dollars are already being bet illegally in the United States.

So just to think that you're going to make it legal and it's a little more trustworthy because people can go to a facility or use their bank cards more frequently, is going to stop the offshore market is a bit of a stretch.

“I think we'll claw back some of it, but if you look at what's happening in the state of the industry today, for example, with sports betting only available in a handful of states; however, from a broadcast perspective, (a) national network like ESPN, CBS, Fox Sports, broadcasting gambling shows? If you're sitting in Illinois or California and you watch one of those shows and you decide you want to make it bet, your only option, really, is an illegal offshore bookmaker.”

Rebuck has attempted to make that point clear during testimony before politicians considering legalization in their state.

“Every hearing I've had as a legislator in the state, I tell them, ‘Online gambling exists in your state today,’ ” Rebuck said. “ ‘Representatives, respectfully, you all have staff. Most of your staff are probably aged 22 to 35. Tell him to go back today, type in the following on Google: ‘Where can I place a sports bet in … Indiana.’ Boom. Google it right up and open account. You'll be gambling in five minutes.”

Curtailing Offshore Market Major Issue for Industry

The topic is heavy on the minds of the collective ecosystem and served as the grist of a lively panel discussion at the MIT Sloan Sports Analytics Conference in March. There, data analyst Jeff Ma engaged William Hill chief marketing officer Sharon Otterman and FanDuel president Kip Levin about ways to compete with the established offshore market.

Ma stressed the development of new and creative offerings as crucial, and later told that domestic bookmakers are currently “focused on other things.”

“There’s some that I know that are trying to do some different things, but generally I don’t think the current players are,” he said.

Gillespie said American gaming entities must first focus on the fundamentals of service to earn the business of sports bettors with years of history with offshore bookmakers.

“Do the U.S. guys need to be more innovative? I would actually argue that they need to do a better job on the basics,” Gillespie said. “They need to ensure that customers can register and deposit before creating new and innovative ways to spend the money that’s in the account.

“If you can’t even fund the account, it doesn’t matter what kind of gambling offering is available to them because they won’t be able to get that far. I really don’t think it’s about innovation. Before Americans can innovate and go to the leading edge of technology, they need basic sports betting technology.”

Offshore bookmakers entice bettors with exotic prop bets or more tempting lines, but Bigio said domestic bookmakers are positioned to counter with imaginative in-play bets that would be beyond the means of offshore bookies because of latency and their lack of official data deals with professional sports leagues. MGM has data and sports betting deals with the National Basketball Association, Major League Baseball and the National Hockey League.

How Can Legal Bookmakers Beat Offshore?

“In play-betting and more casual betting, it's going to attract a very different type of player,” Bigio said. “And I think that the land-based regulated sites, we really need to take advantage of the data that we’re getting, which some of the offshore sites might not be getting in the same speed.

“We'll be able to offer different types of bets in-play that will be a differentiator now between the offshore market and the deregulated market."

Max Bichsel, U.S. director for platform-provider Kambi, agreed that unique offerings, coupled with the ability to quickly deposit and withdraw money from accounts, would be a crucial enticement in a regulated market gaining a foothold.

“I think how you're able to combat (offshore companies) is not only just regulating the market and making it a safe place for a bettor to play, it's also giving them a product that's innovative,” he told “It's newer functions, it's newer offerings.

“It's whether or not (Rams quarterback) Jared Goff is going to throw for 60 yards or 64 yards or 23 yards on a specific drive rather than just saying, ‘Hey, are the Rams going to win the game?’ ”

Value will always remain a consideration, however, particularly, Bigio said, for bettors who patronize multiple sites.

“First of all, the offer has to be competitive,” Bigio said of the legal domestic market. “And this is really more for an advanced bettor who would understand that the price of a bet, the vig is, is part of the return on investment.

“I think there was an example with FanDuel and DraftKings in New Jersey where they launched and they had essentially the equivalent of 25- to 30-cent lines and people who are already betting online with 10-cent lines just said, ‘They're just basically passing through their tax implication to the bettor.’

“So, at the beginning, the regulated sites are going to have to understand that they need to be at least close to competitive from a pricing perspective. It won't really matter to the average bettor because they don't necessarily realize how much they're paying for the bet. But I promise you that the offshore gambling sites will start promoting that their bets are actually cheaper and that players would keep more of their money.”

Regulation Targeting Advertising Could be Crucial

Though Internet searches continue to yield a plethora of offshore options made illegal by The Wire Act and UIGEA, there is recourse against advertisers who ingrain the presence of the gray market in mainstream America, Bigio said. Google told in April it was finalizing standards for advertising in the United States.

“When the legislation happens, it's important to remember that there are ways advertisers can be punished,” Bigio said. “You’d have to change some communications law in order to stop those sites who are currently advertising their free play or sites across the US via podcasts, are still on television or radio spots and so forth.

“If you’re trying to really curtail the black market, you have to implement some sort of policies that disallow or certainly dissuade companies from accepting those advertising dollars because just making it legal doesn't necessarily mean that the gray market is going to go away.”

Because for now, misinformation proliferates, Rebuck said. DGE has yet to target New Jersey residents using offshore companies in a state with numerous legal options.

“I'm not going after the people here yet. That's OK,” he said. “I will tell people that if they're gambling offshore, I'm not going to say I'm never going to go after their money. But right now we've got too much other work to do. And you may stumble upon a few cases that we may just see what we can do.”

Rebuck: Education Will Precede Adjudication

Rebuck said his approach has been about educating affiliates and mass media that a suffix such as “.ag” at the end of a gambling site URL disallows them as advertisers in his state. Then he seeks contracts and contacts with a cease-and-desist order with leverage.

“Let's work it out without having any adversarial relationship,” Rebuck said, reciting his plea to unwitting offenders. “And it's worked out really well. Because most of them, most of the people we're dealing with, I think they truly didn't know.”

Many won’t until more states legalize and regulate sports betting – crucially with a viable online component. Local bookies or websites in Curacao or Antigua will continue to pick at the fringes.

“I think theoretically it's something you can never get rid of,” Bichsel said. “You can never totally get rid of a dark market or an unregulated market.”

But Rebuck, with the pluck of a regulator hard at this for nearly a decade, keeps trying.

“It's going to take time,” he said. “I don't think they're real fearful of being cannibalized in the United States at this point. But as more and more states come on, I think there it’s definitely going to have an impact. Definitely. But right now, they're good. They're big, they're good. I don't like them, but they know we're going after them in every way. I can possibly go after them.”

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