A new report by the American Gaming Association (AGA) shows that illegal operators account for nearly one-third (31.9 per cent) of the total gambling market in the United States.
The AGA’s analysis found that Americans wager a total $673.6 billion annually, resulting in a loss of $15.3 billion in yearly gaming tax revenue for states.
The illegal market is said to have grown by 22 per cent since the AGA’s last report in 2022, driven by illegal iGaming, expanded use of unregulated skill machines, and persistent illegal sports betting.
Illegal sports betting, which includes bookies and offshore betting, produced annual handle of $84 billion, resulting in $5 billion in revenue and a tax loss of $1 billion for US states.
The report notes, however, that the share of sports bettors using illegal operators has fallen by one-third, with the market share of illegal sportsbooks reducing from 35 per cent to 24 per cent.
Online slots and table games generated $466.2 billion in annual handle, equating to $18.6 billionn in annual revenue for illegal operators. Lastly, unregulated machines in bars and taverns reportedly generated $123.4 billion in handle and $30.4 billion in revenue.
According to the AGA, the number of unregulated machines in operation has risen by 7.7 per cent since 2022 to 625,316, posing a serious risks to consumers and diverting billions from public programs.
The report is based on a survey of 2,454 adults, which analysed illegal and regulated gaming activity over the past year, as well as observations of unregulated gaming machines.
“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,” said AGA president and CEO Bill Miller. “It’s time for a national crackdown on the pervasive illegal market that is draining state coffers and putting people at risk.
“These bad actors operate in the shadows with zero consumer protections, no responsible gaming obligations and no economic return to the communities they exploit.
“Combating them requires not only stronger US enforcement, but also continuing to work closely with our international partners to shut down offshore operators and hold them accountable.”