GeoComply Data Links Enforcement to Regulated Market Growth

GeoComply data shows that U.S. states taking action against offshore sports betting are directing more players toward regulated markets. The geolocation provider reached this conclusion after observing sports betting activity across 10 U.S. states with comparable adult populations.

Several states have pursued legal action against unauthorized offshore operators through enforcement measures or cease-and-desist letters. Following the removal of these illegal operators, licensed gambling platforms in those states have reported an increase in new account registrations.

Legal online casinos and sports betting operators have also experienced higher levels of user activity.

Crackdowns on Offshore Sites Drive Online Sports Betting Growth

GeoComply’s recent study analyzed sports betting activity across 10 states with similar adult demographics. The analysis centered on five states that initiated enforcement measures against offshore operators within the past year: Arizona, Michigan, Louisiana, Massachusetts and Tennessee.

These were compared to five states that did not pursue similar legal actions: Indiana, Kentucky, Iowa, North Carolina and Virginia.

The review found that states taking legal action experienced a 10% faster increase in active users year-over-year compared to the other states. They also recorded a 39% rise in new account registrations during the same period.

Commenting on the study’s findings, GeoComply CEO Kip Levin said: “The results show that enforcement is effective. When states take action against unlawful sportsbooks, players shift toward the legal, licensed market.”

He added that many consumers struggle to distinguish between regulated sportsbook platforms and offshore sites. However, regulatory efforts help raise awareness and direct players toward safer, more accountable operators.

Tennessee and Michigan Lead Fight Against Illegal Online Casinos

Gambling regulators in Tennessee and Michigan have been among the most aggressive in targeting illegal operators. In a recent move, Tennessee regulators fined five offshore sportsbooks $250,000 total for offering illegal gambling services in the state. Each operator was ordered to pay a $50,000 fine.

Tennessee’s sports betting law empowers its Sports Wagering Council to impose a $10,000 fine on operators for a first violation. A second offense results in a $15,000 penalty, followed by a $25,000 fine for a third infraction. After that, the council may issue a $25,000 fine for each additional bet accepted in violation of its rules.

Michigan has followed a similar course of action by issuing cease-and-desist letters to unlicensed gambling operators. Over the past year, the state regulator has sent more than 40 letters to platforms offering betting services without approval. These measures have put a stop to the activities of operators such as Bovada and BetUS in the state.

Commenting on the necessity of enforcement, Michigan Gaming Control Board Executive Director Henry Williams said, “Illegal betting activities exploit vulnerable consumers. It also weakens the integrity of the regulated gaming industry.”

He added that Michigan residents are entitled to the safeguards provided by licensed, legal gaming. As a result, regulators in the state will continue to take firm action against those who operate outside the law.

In Arizona, regulators have issued stop orders to multiple operators taking bets in the state, describing them as “alleged felony criminal enterprises.” In Massachusetts, the attorney general followed up on recent crackdowns by issuing cease-and-desist letters last month to SportsBetting.ag and BetOnline.ag.

U.S. Attorneys General Press DOJ on Offshore Online Betting

Offshore betting operators in the U.S. are likely to face more challenging conditions in the near future. This comes after 50 state attorneys general urged the U.S. Department of Justice in August 2025 to take stronger action against offshore sportsbooks.

In an Aug. 4 letter, the attorneys general argued that they cannot eliminate the market on their own. The letter stated in part: “We seek the DOJ’s cooperation in holding these companies accountable to the fullest extent permitted under state and federal law, both criminal and civil, for any potential violations.”

The letter also cited a November 2022 report from the American Gaming Association, which estimated that illegal online casino and sports betting handle totals around $400 billion annually. That represents about one-third of all sports betting wagers in the U.S. and results in nearly $5 billion in lost tax revenue.

Despite the request, it remains unclear how the DOJ will respond. Should the department take action against illegal betting platforms, it could pursue any of these three options:

  • Collaborate with financial institutions to block illegal gambling transactions.
  • Use federal law to obtain injunctive relief and seize websites.
  • Confiscate the assets and domain names of illegal offshore gaming entities, several of which have already been targeted by state regulators.

If any of these measures are implemented, players interested in sports wagering will be pushed toward licensed sites. As a result, regulated sports betting and casino operators are expected to see continued growth. Such a shift would benefit all parties involved, as state governments would collect more tax revenue and consumers would play under regulated conditions.