New analysis from the American Gaming Association indicates that U.S. gamblers are gambling on illegal sites in droves.
The AGA found that Americans wager $673.6 billion annually with illegal and unregulated operators. The AGA says this money is diverted from licensed operators and denies communities resources that fund infrastructure, education, and public safety.
“Illegal gambling operators are thriving at the expense of American consumers, siphoning billions in tax revenue from state governments, and undercutting the efforts of the legal market,” AGA President and CEO Bill Miller said in a statement. “It’s time for a national crackdown on the pervasive illegal market that is draining state coffers and putting people at risk.”
The analysis indicates that illegal igaming, expanded use of unregulated skill games, and illegal sports betting are driving a market that has grown 22% since the AGA’s last report in 2022.
In a news release, the AGA said growth in the legal market in recent years “has kept the illegal market’s share of total U.S. gaming revenue largely steady, with illegal operators capturing smaller shares of sports betting and igaming revenue” – and that illegal operators account for nearly one-third (31.9%) of the U.S. gaming market.
The illegal and unregulated gambling market generated an estimated $53.9 billion in annual revenue for offshore betting sites and unregulated machine operators, robbing state governments of $15.3 billion in taxes each year, the AGA said.
Unregulated machines remain the fastest-growing threats to legal gaming, with more than 625,000 machines operating in bars, restaurants, and convenience stores, a 7.7% increase since 2022. The machines generated $30.3 billion in revenue and cost states $9.5 billion in lost tax revenue. With no regulatory oversight, these machines pose serious risks to consumers and communities.
Illegal online slots and table games generated $18.6 billion in revenue, up nearly 38% since 2022. The share of igamers who play only on legal sites fell from 52% in 2022 to just 24% today, while the share using legal and illegal sites soared to 49%, nearly tripling in just three years. Despite this growth, illegal operators hold a smaller share of the total U.S. igaming market than three years ago.
Americans wagered an estimated $84 billion with illegal bookies and offshore sportsbooks in the past year, generating $5 billion in revenue and resulting in $1 billion in tax losses. Compared to 2022, the share of sports bettors exclusively using illegal sites fell by a third and illegal sportsbooks’ share of the U.S. sports betting market fell from 36% to 24%. One in 10 sports bettors wager exclusively with illegal sources.
“These bad actors operate in the shadows with zero consumer protections, no responsible gaming obligations, and no economic return to the communities they exploit,” Miller said. “Combating them requires not only stronger U.S. enforcement, but also continuing to work closely with our international partners to shut down offshore operators and hold them accountable.”
