Sportsbook.ag Outage Offers Cautionary Tale For Players With Offshore Accounts

Written By Jose Colorado on March 30, 2022
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The Canadian betting landscape was less than ideal for many years.

Single-event wagers weren’t allowed, and players only had provincial lottery gaming options. As a result, the markets generally lacked the flair and creativity of contemporaries to the south.

An unfortunate consequence of that was millions of Canadian dollars flowing into offshore accounts and grey market coffers each year.

But with Ontario’s historic online gaming market launching on April 4, much of that will change – or so one would think.

Offshore books still very active in US despite increased regulation

If our neighbour to the south is any indication, punters may still take to offshore accounts.

Consider that in 2018, the United States repealed the Professional and Amateur Sports Protection Act, opening the floodgates for sports betting in the US.

With the decision, states could now determine whether and how to legalize sports betting.

Previously, Nevada was the only legal sports betting option in the US.

Fast forward to 2022, and despite that increased regulation, billions still flow to offshore markets. In fact, the American Gaming Association, Eilers & Krejcik, and H2 Gambling Capital estimate it is roughly $50 billion – $200 billion annually. However, much of that could be taking place in states still unregulated.

Sportsbook.ag latest cautionary tale of offshore risk

But that doesn’t mean offshore books are a smart move. Sportsbook.ag provided the most recent example of that.

Recently the offshore site went offline for “maintenance.” Terrified users scrambled for answers, but the site’s call line was unavailable.

Emails and chats went unanswered.

According to ActionNetwork, some punters had $30,000 tied up with the sportsbook. Luckily the funds did appear in the end. But in total, the ordeal lasted for more than 60 hours, from March 21 to March 23.

The scenario provides a chilling cautionary tale. Since Sportsbook.ag is not legal in the US or Canada, gamblers would have likely had little recourse if the site stayed down.

A similar experience could wait for Canadians considering the offshore route.

Ontario to enjoy access to top casino and sportsbook operators

Luckily, players will soon have access to some of North America’s largest operators in Ontario.

That means the Ontario Lottery and Gaming Corporation will no longer hold its monopoly on gamblers, making offshore books less attractive.

As of March 28, there have officially been 16 operators registered with Ontario’s Alcohol and Gaming Commission. Amongst those names are some of the heaviest hitters, including BetMGM, FanDuel and PointsBet.

However, it would be naïve to believe Canadian bettors will altogether ditch offshore books. Potentially higher payouts elsewhere and better markets will always entice a particular crowd.

KGC, Ultimate Bet and Canada’s cheating scandal

Canada does have a history of scandal as well.

One of the most well-known examples occurred in the 2000s with Kahnawake Gaming Commission.

The KGC is the regulatory body created by the Mohawk Council of Kahnawá:ke (based on Mohawk lands just outside Montreal) to oversee the Nation’s gaming interests.

Currently, the Commission licenses over 50 online gaming operators (approximately 250 online gaming sites).

But one of KGC’s biggest headaches arose from issues with one particular operator, Ultimate Bet.

Following a multi-year investigation, the Commission concluded in 2009 that cheating had occurred on Ultimate Bet’s poker site. KGC imposed multiple sanctions on Tokwiro Enterprises (Ultimate Bet’s ownership).

Those penalties included:

  • US$22M refunded to impacted Ultimate Bet players
  • US$1.5M fine
  • An order that Ultimate Bet improve its operations to avoid further cheating

“We remain optimistic that this experience and the lessons learned from it will result in a higher standard of gaming regulation for companies licensed and regulated within the Mohawk Territory of Kahnawá:ke and elsewhere, “said KGC’s chairperson at the time, Dean Montour.

Growth of legalized sportsbooks could impact illegal offshore rivals

In the US, the legalization of the sports betting market appears to be tapering off more offshore accounts of late.

In 2021, Bovada pulled out of New York, reportedly to avoid state persecutors. Meanwhile, Bookmaker and BetOnline withdrew from New Jersey in 2019.

With April 4 looming, only time will tell how Ontarians react to having a competitive wagering market.

One thing is for sure—many will be watching.

Photo by Shutterstock
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Jose Colorado

Jose Colorado is a British Columbia-based writer. He lives in Burnaby and loves sports, anime, writing, business and the occasional walk on the beach.

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