The Differences Between Black and Gray Gambling Markets

April 17, 2019, Play USA, by Steve Ruddock

All hell broke loose on Twitter when the social media account of an offshore online sportsbook MyBookie took an ill-advised swipe at Dave Portnoy, the founder of Barstool Sports. The exchange is the reason the popcorn GIF exists, but it’s also a teachable moment for US sports bettors, as it shone a light on the practices of the offshore, unregulated sports betting market, and more importantly, questioned their legality.

Apology not accepted

Without rehashing the back and forth, Portnoy put the sportsbook through a social media torture session that was reminiscent of the end-scene in Braveheart. Only unlike William Wallace, the sportsbook quickly capitulated and profusely apologized to Portnoy. The apology was too little, too late.  It couldn’t stop hundreds of Twitter users from posting their negative dealings with the book. And throughout the multiday battering, Portnoy repeatedly called the site an “illegal” sportsbook. Not everyone agreed with that description. And why would they?

The mainstream press routinely cites odds from the offshore books, and the general public doesn’t have the time or desire to sift through gaming laws, and in other cases, verify the licenses of an online sportsbook to see if it’s licensed in the US or operating offshore. But Portnoy is right. Offshore sportsbooks and online gambling sites serving US markets are breaking the law.

Are offshore sportsbooks illegal?

The short answer to that question is yes, but the answer isn’t always black and white. There’s a lot of subtlety when it comes to why and determining which laws they are actually breaking. Jurisdictions fall into one of three general categories:

  • White markets: Where gambling is legalized.
  • Black markets: Where explicit prohibitions exist.
  • Gray markets: Where the lack of clearly defined laws causes ambiguity.

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