Connecticut To Follow Michigan’s Lead in Banning Illegal Underscoreg Bovada

Less than a month after Michigan Gaming Control Board’s cease and desist order to Bovada, an illegal offshore sports betting provider, Connecticut regulators are preparing to take similar action.

A report indicates that the Connecticut Department of Consumer Protection Gaming Division is on track to become the second state in a short period of time to refuse the illegal operator in order to safeguard the top sports betting sites in the lawful market.

This week, representatives for the Department of Connecticut sports betting regulators have drafted a cease and desist letter for the offshore sportsbook owned by Harp Media, based in Curacao.

This action is expected to encourage customers to use legal Connecticut sports betting apps, which provide a safer option for bettors and contribute to tax revenue for the state government budget.

Connecticut and Michigan are just now implementing actions, but five other states have had similar regulations in place for years.

Bovada exited the Maryland sports betting market in 2012, followed by Nevada, New Jersey, and Delaware in 2014. The company withdrew from the New York sports betting market in 2021.

Why Connecticut is banning Bovada

Offshore sportsbooks operating in the United States is a longstanding issue. Just recently, the Campaign for Fairer Gambling (CFG) published a report revealing that $9.5 billion in illegal bets were placed in the sports betting markets of New York, New Jersey, and Minnesota last year.

For over ten years, Bovada, a popular offshore sportsbook and online casino in America, has been closely monitored by regulators. Legal sports betting apps in the market must adhere to licensing fees, taxation, and state regulations, unlike Bovada and other offshore operators.

Illegal sportsbooks not only drain millions in tax revenue from legal states, but their lack of regulation also enables Bovada to offer more attractive bonuses to customers due to their lower expenses. This poses a significant challenge for sportsbooks in Connecticut looking to attract customers away from illicit operators with competitive promotions.

In a letter to U.S. Attorney General Merrick Garland in 2022, Bill Miller, President and CEO of the American Gaming Association, specifically mentioned Bovada.

“In addition, these unauthorized websites benefit from various competitive advantages that enable them to provide superior odds and promotions while disregarding any responsibility for promoting safe gaming practices,” he explained. “This is because they are not subject to state and federal taxes or the same regulatory compliance requirements and costs.”

The Connecticut legal sports betting market is relatively small with only three licensed providers: FanDuel, DraftKings, and Fanatics. It is difficult to determine the level of betting activity that Bovada has in the state. Fanatics recently entered the market in December.

In April, they collectively generated $156.8 million in bets, solidifying their status as a lower-tier sports betting jurisdiction in terms of handle. FanDuel and DraftKings continue to dominate the market.

What’s next for Bovada?

This week, Harp Media, the owner of Bovada, will be served with a cease and desist order, resulting in the offshore operator being shut down in two U.S. states within the past two weeks.

The decline in Bovada’s business in Connecticut, a small market, may not severely impact its finances, but the heightened visibility of its unlawful activities in the United States is detrimental to the company’s reputation and bottom line.

Bovada continues to operate in 44 states in the US, even though it is considered an illegal offshore sportsbook. The company faces the possibility of other states taking action, encouraged by the AGA, to shut down its operations on American soil entirely.