Strongest Georgia Sports Betting Argument Takes Hit

The most popular argument in favor of Georgia sports betting has long focused on the positive effects of gambling regulation. It makes sense in theory. It may also have just imploded.

According to the American Gaming Association, the illegal sports betting market in the United States is back to being on the rise. This comes as somewhat surprising.

Nearly 40 states have legalized some form of sports betting since 2018, when the Supreme Court of the United States overturned the Professional and Amateur Sports Protection Act. No rational person thought states having the right to regulate sports betting would entirely eradicate the black market. But it was supposed to become more of a blip.

With online sports betting in the United States more accessible than ever before, the expectation is that the illicit industry will hover somewhere beneath 15 percent of all gambling. It turns out that isn’t the case. Far from it, in fact. And that is going to come as bad news for anyone who supports the eventual legalization of Georgia sports betting.

The United States’ Illegal Sports Betting Market is on the Upswing

The American Gaming Association conducted their most recent batch of analysis in August. As Darah Cohen writes on their official website, the results verge on staggering:

“A new analysis from the American Gaming Association (AGA) finds that Americans wager a total $673.6 billion annually with illegal and unregulated gambling operators, diverting activity away from licensed operators and denying communities critical resources that fund infrastructure, education, and public safety. Driven by a sharp rise in illegal iGaming, expanding use of unregulated skill machines, and persistent illegal sports betting, the illegal market has grown 22 percent since AGA’s last report in 2022.

Growth in the legal market in recent years has kept the illegal market’s share of total U.S. gaming revenue largely steady – with illegal operators capturing smaller shares of sports betting and iGaming revenue – but illegal operators still account for nearly one-third (31.9 percent) of the total U.S. gaming market. The illegal and unregulated gambling market generated an estimated $53.9 billion in annual revenue for offshore betting rings and unregulated machine operators, robbing state governments of $15.3 billion in taxes each year.”

This analysis is presented as a defense of legal sports betting. That has some merit. Regulated-market expansion adds to state revenues, which means there is more money available for local programs and state economies.

At the same time, the fact that illegal sports betting still makes up such a large share of the market is potential damning. If it doesn’t completely undermine a familiar Georgia sports betting argument, it at least compromises it.

Georgia Sports Betting Advocates Continue to Spotlight Importance of Regulation

Representative Mark Wiedower is among the most vocal supporters of sports betting in Georgia. And he has, on numerous occasions, extolled the difference-making virtues of regulation.

“Rep. Marcus Wiedower said he simply wants to put guardrails on industries already happening in the state,” Pat Evans of Legal Sports report wrote over the summer. “Wiedower sponsored a resolution for a constitutional amendment to allow sports betting, which is still alive heading into next year’s legislative session. Along with the constitutional amendment, Wiedower introduced a bill with industry framework that includes 16 licenses and a tax rate of 24 percent on sports betting revenue.”

Look, on many levels, Wiedower has a point. Right now, none of the Georgia sports betting taking place inside the state is regulated. Residents are either using some of the most popular offshore sportsbooks or crossing state lines to place wagers elsewhere. Regardless of how they are betting on sports, The Peach State is missing out on revenue.

Still, sports betting legalization in the United States is so often portrayed as an antidote to illicit activity. When you are working from a baseline of complete illegality, this is to some extent true. Over time, though, the American Gaming Association’s findings suggest there is a cap on how much illegal betting can actually be curtailed.

Why is Illegal Sports Betting Potentially on the Rise?

This is a complicated question. And it definitely does not have a singular answer. The American Gaming Association notes that “unregulated gaming machines” remain one of the largest catalysts. They are apparently becoming more apparent in bars, restaurants and similar establishments.

To be honest, though, this rings a little hollow. Those machines must be used in-person. We know for a fact the vast majority of sports betting in the United States takes place online. Insofar as there is a root cause, it has to be something else.

One thing’s for sure: This is bound to come up during the next legislative Georgia sports betting discussion. The risks of legal gambling are already sticking points among detractors. Having the knowledge that it may not tamp down illegal activity as much as expected will not sit well with him.

On top of that, there is a world in which this gets even worse.

Some states are already raising sports betting taxes. Others are talking about introducing safety guardrails, such as required background checks and betting limits. All of these will cost sportsbooks money. They might respond by passing costs onto the consumer. We have already seen this with sports betting in Illinois. Certain operators are assessing fees to each transaction to offset rising overhead costs.

More customers may find themselves gravitating offshore sites that typically don’t have per-transaction charges. To be sure, this isn’t a prediction. But it is something to consider given these findings. And without question, it’s a thorn in the side who continue to champion the importance of legalizing Georgia sports betting.

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