How Red Tape Might Be Driving American Punters Back to Offshore and Crypto Books
The Irony of Legalisation
When the US Supreme Court struck down PASPA in 2018, the expectation was simple – bring gambling into the light, tax it, and protect consumers. States rushed to regulate, sportsbooks launched en masse, and TV screens were flooded with ads from newly minted betting giants.
But fast-forward to today, and a growing number of sharp punters, casual fans, and even industry insiders are starting to ask:
Is the US sports betting market too regulated for its own good?
From endless ID checks and geofencing nightmares to limited market access and capped promos, what was once meant to be a frictionless, modern betting ecosystem is beginning to feel like a bureaucratic bottleneck – and many bettors are quietly voting with their feet.
The Over-Regulation Problem
Let’s break down what “over-regulated” really means in practice.
1. Fragmented State-by-State Licensing
Unlike countries that regulate betting nationally, the US has taken a patchwork approach, with each state creating its own rules, licensing system, and tax structure. This means:
- You can bet in New Jersey but not in Texas.
- A brand licensed in one state may be illegal in the next.
- Bettors crossing state lines often get locked out mid-bet due to geolocation errors.
This creates a confusing and inconsistent experience for users, and a nightmare for operators.
2. KYC and Identity Obsession
Most US books require full KYC even for modest deposits. That means:
- Uploading photo ID
- Sharing SSNs
- Passing facial recognition scans
- Verifying location in real time
While KYC is important for preventing fraud and underage gambling, the US model often overcorrects, treating $20 bettors like potential financial criminals. The result? Punters looking for privacy are bouncing to offshore or crypto sites.
3. Limited Market Access
In many states, only a small number of operators are approved, and those licenses are often tied to existing land-based casinos. That means fewer options, less competition, and weaker odds. Some bettors report odds that are significantly worse than what’s available offshore.
Even worse, certain bet types – player props, in-game markets, esports, or political bets – are outright banned in some states, even though bettors can find them elsewhere with ease.
4. Bonus Restrictions
Promotions are heavily restricted in many regulated states, with strict limits on what can be offered, how it’s worded, and who can receive them. Some states ban risk-free language altogether or require complex disclaimers that kill the appeal.
This makes bonuses less generous, less accessible, and more confusing, pushing value-hunters to less restricted markets.
Offshore and Crypto: The Silent Rebound
While lawmakers and regulators praise themselves for “crushing the illegal market,” something else is happening in the background – a quiet migration back to offshore sites and crypto-first betting platforms.
And it’s easy to see why.
What Bettors Get Offshore or in Crypto:
- No geolocation tracking
- Fewer ID checks (often none until large withdrawals)
- Higher betting limits
- Faster withdrawals – sometimes within minutes
- More flexible odds and markets
- Bonuses without legal red tape
- Privacy and global access
Platforms like Stake, BC.Game, BetOnline, and Thunderpick are seeing a massive influx of US users, not just because they’re unregulated, but because they’re often better products for the average bettor.
Regulation vs. Reality
To be clear: regulation isn’t the enemy. Well-designed betting laws can protect users, keep fraud in check, and create sustainable, tax-generating industries. But in the US, over-regulation has created a product that’s less accessible, less competitive, and more frustrating than what punters can find offshore.
And unlike in the pre-legalisation era, today’s punter doesn’t need a shady bookie on the corner – they just need a VPN and a crypto wallet.
Why It Matters
This trend should concern lawmakers and licensed operators alike. If the goal was to reduce illegal gambling, you can’t win by making the legal option worse. But that’s what’s happened in many states.
Instead of creating frictionless platforms that compete on merit, the US has created walled gardens full of red tape. And punters – especially younger, crypto-savvy ones – are walking right past the wall.
Over time, this could mean:
- Lost tax revenue
- Declining retention for regulated books
- A widening black (or grey) market
- Less transparency and oversight overall
What Needs to Change?
For the US betting market to thrive long-term, a few key shifts are needed:
- National harmonisation – A federal framework or unified model across states would reduce fragmentation and improve consistency.
- Smarter KYC – Keep it for fraud prevention, but make it smoother, quicker, and less invasive.
- Better UX – Compete with offshore books by offering better apps, odds, and promos – not just because you’re “legal.”
- Modern product flexibility – Let bettors access the markets they want. If they can bet on player props or crypto odds offshore, they should be able to do it locally, too.
Final Thoughts: Regulation Should Empower, Not Restrict
The intention behind US betting regulation was good – to bring gambling into the open, protect users, and generate revenue. But when the legal option becomes more restricted, less fun, and more bureaucratic than the grey-market alternatives, you’ve got a problem.
Bettors don’t care about legal frameworks – they care about price, speed, privacy, and experience.
Right now, crypto books and offshore sportsbooks are winning that fight – quietly, but convincingly. If US regulators don’t adapt soon, they’ll find themselves presiding over an industry where the legal doors are wide open – but the punters are already gone.
