The American Gaming Association (AGA) latest analysis shows that illegal gambling still accounts for nearly one-third of the U.S. market share, causing an annual loss of about $15 billion in tax revenue for various states.
According to the report, Americans bet a total of $673.6 billion annually at illegal and unregulated gambling operators, squeezing the market space of licensed gambling businesses and depriving financial resources that could be used for infrastructure, education, and public safety. Driven by the rapid growth of illegal online gambling (iGaming), the continuous expansion of unregulated skill-based machines, and the presence of illegal sports betting, the illegal market has grown by 22% since the last report was released in 2022. Although the expansion of the legal market has kept the proportion of illegal gambling stable in overall revenue, illegal operators still occupy 31.9% of the U.S. gambling market share.
Illegal and unregulated gambling brings in about $53.9 billion in revenue annually for offshore betting groups and machine operators, and causes a loss of $15.3 billion in tax revenue to state governments. AGA President and CEO Bill Miller stated that illegal gambling "sacrifices consumer interests, drains state fiscal revenue, and suppresses the development of legal gambling," and called for a nationwide crackdown on this rampant market.
The survey shows that unregulated slot machines remain one of the main threats to legal gambling, with more than 625,000 such machines currently operating in bars, restaurants, and convenience stores, growing by 7.7% since 2022, bringing in $30.3 billion in revenue and causing a tax loss of $9.5 billion. Due to the lack of regulation, these machines pose serious risks to consumers and communities.
In terms of iGaming, illegal online slots and table games generated $18.6 billion in revenue, an increase of nearly 38% from 2022. The proportion of players who only gamble on legal sites has dropped from 52% to 24%, while the proportion of those using both legal and illegal platforms has soared to 49%, nearly doubling in three years. Nevertheless, illegal operators' share of the overall U.S. online gambling market has still declined compared to three years ago.
In terms of sports betting, Americans bet about $84 billion in the past year with illegal and offshore operators, generating $5 billion in revenue and causing a $1 billion tax loss. The proportion of sports betting players using dedicated illegal platforms has dropped by one-third since 2022, and the market share of illegal sports betting has decreased from 36% to 24%, but still one-tenth of players only bet through illegal channels.
Miller emphasized that these operators lack consumer protection and responsible gambling obligations, and offer no economic return to the community. He called for strengthening domestic law enforcement and collaborating with international partners to shut down offshore operators and hold them accountable.
