The Research Is In: States with Successful Sports Betting Regulation See Decrease in Illegal Gaming

Legal, regulated gaming facilitates a secure playing environment that safeguards consumers and can generate significant tax revenue for states. However, developing the laws and regulations that will encourage players to move from illegal to legal sites is something that lawmakers must carefully consider. Fortunately, one resolution is clear. In two new pieces of research commissioned by iDEA Growth, data shows unambiguously that states with low barriers to regulated online sports betting enjoy significantly lower rates of illegal gaming.

In “Analysis of Tennessee’s Proposed Minimum Hold Requirement,” our researchers compared and contrasted successful legal sports betting measures in Denmark, the United Kingdom, and in the state of New Jersey against a harsh and restrictive potential Tennessee sports betting model. The Tennessee legislature’s proposed “minimum hold requirement,” which spikes tax requirements for sports betting operators and sinks payouts for customers, emulates the French model; a model that is lagging far behind more lenient models in the U.S. and abroad.

iDEA’s research has found that the fewer barriers to entry in the legal sports betting market, the more people will opt for safe and regulated gaming instead of its illegal counterpart. In “In-Person Registration For Online Sports Betting. A Quantitative And Qualitative Analysis,” research found that requiring consumers to register for sports betting accounts at an onsite location, in-person is one such barrier. Making access to legal sports betting secure, smartphone-accessible, and convenient encourages players to move away from illegal sites.

“Convenience and security are key to any form of online entertainment,” said Jeremy P. Kleiman, co-founder of iDEA Growth. “Today’s technology can provide both a secure and reliable online registration process, as well as an efficient and convenient user experience. There is no compelling reason to require in-person registration.”

Both research models were conducted by Eilers & Krejcik Gaming, an independent research and consulting firm focused on economic gaming models around the world. The firm’s data was integral in West Virginia and Indiana adopting legalized sports betting.