State Crackdowns on Offshore Sportsbooks Drive Players to Legal Market, New GeoComply Data Shows

A Clear Enforcement Impact

GeoComply’s analysis compared player activity in August across two groups of five states with similar adult populations. One group consisted of states that have recently issued cease-and-desist letters or taken other enforcement actions against offshore operators, while the other group had not.

The results showed a stark contrast:

• States that took enforcement action saw, on average, 10% more year-over-year growth in active players during the month of August.
• Even more significantly, new account sign-ups were 39% higher in the enforcement states compared to the non-enforcement states.

“These findings demonstrate that enforcement works,” said Kip Levin, CEO of GeoComply. “When states crack down on illegal sportsbooks, players migrate to the legal, licensed market, where they’re protected and where their play generates state tax revenue.”

A Shift in Consumer Behavior

A central challenge in the U.S. market has been consumer confusion, with many players unable to distinguish between a state-regulated sportsbook and an unregulated offshore site. The new data suggests that enforcement actions are a powerful tool for raising public awareness.

“Consumers often can’t tell the difference between a state-regulated sportsbook and an offshore site, but when regulators take action, it raises awareness and helps guide players to safer, accountable operators,” Levin explained.

A Growing National Push for Federal Action

The new data arrives amid a broader national focus on the persistent threat of the illegal market. An analysis from the American Gaming Association (AGA) released last month found that illegal gambling still accounts for nearly a third of the entire U.S. market, siphoning away billions in potential tax revenue.

The momentum for a crackdown is also building at the federal level. In August, a bipartisan coalition of 50 State Attorneys General sent a letter to the U.S. Department of Justice, urging it to take action against offshore sportsbooks. The letter underscored that while state-level enforcement has been effective, it cannot eliminate the problem on its own.

Levin echoed this sentiment, framing the issue as a battle for the entire legal industry.

“Illegal offshore sportsbooks remain the biggest competitor to the legal market, not other regulated operators,” he said. “A coordinated federal effort would further accelerate the positive shift that has been started by state-level enforcement.”

GeoComply has been a vocal advocate for stronger enforcement, releasing a video in February that highlighted the dangers of offshore gambling. Since then, at least fifteen states have taken action against these operators, a trend that the company’s new data suggests is paying clear dividends for the legal market.