PASPA – The Benefits Of Regulation And Legalization


With the Supreme Court overturning PASPA and key states moving to legalize and regulate sports betting quickly, there are key benefits for states like New Jersey and the US consumer. They include:

Weakening The Illegal Sports Betting Market
Regulation and licensing would provide US bettors with protection from fraud and unfair behavior, such as bookmakers refusing to pay out winnings. As bettors move to licensed onshore legal sportsbooks, the illegal market weakens and that has an impact on associated activities. Money-laundering, criminal syndicates, and the cost of law enforcement will all be positively affected by legalization.

Reducing Gaming-Fixing
Expectations that PASPA would reduce game-fixing never materialized. Not surprisingly, since criminal activity such as game-fixing has close links to the illegal sports betting market and is often a way of facilitating money-laundering. While stamping out game-fixing completely is unrealistic, legalization does incentivize bookmakers to put measures in place to identify and prevent game-fixing.

Improve Social Responsibility
Legalization also allows regulators to put customer protection controls in place. Operators will be required to provide customers with resources to identify problem gambling, impose deposit limits, self- exclude and get help. Know your customer checks would help prevent underage gambling, as well as support anti-money laundering policies.

Revenue Generation
Currently much of the revenue generated by sports betting in the US either goes offshore or is untaxed. Regulation and licensing would allow states to tax sports betting and generate significant revenue from this market. As well as diverting revenue from illegal local and offshore sportsbooks, legalization could also attract more bettors to the market. 12% of Americans say they would bet on sports if it was regulated and legal across the US.7 Estimates of what a legal sports betting market would be worth range from $130 billion to $170 billion per annum.

As a payment partner to US online gaming operators, Secure Trading is positioned to work within the considerable number of states that are now in the process of legalizing and regulating sports betting and with gaming operators to rapidly grow their sports betting revenues.

We anticipate that a steady stream of other states will also legalize sports betting in the next few years, and we are poised to meet those demands as well.

Partnering with a specialized payment service provider is therefore critical to ensure that payment processing is compliant and aligned with your customers’ needs.

If your business would like to explore what it needs to take to maximize this opportunity, please get in touch with our payment experts.

Call +1-844-729-9484.