for early access to the latest igaming videos!
and get the latest igaming news first!
Illegal gambling isn’t just sticking around—it’s growing. New research shows that almost one out of every three dollars Americans wager ends up in the hands of operators working outside the law.
The scale is eye-watering. A study backed by the American Gaming Association (AGA) estimates that 31.9% of all U.S. gambling—worth about $673.6 billion a year—is happening in the illegal market. That’s money flowing to offshore betting sites, underground casinos, and unlicensed gaming machines instead of into state coffers.
In total, those illicit operators are taking in around $53.9 billion a year. For state governments, that translates into $15.3 billion in lost tax revenue—money that could be funding schools, public services, or infrastructure projects.
Gaming Machines and Offshore Casinos on the Rise
One of the biggest culprits? Unregulated gaming machines. They’ve been multiplying in bars, restaurants, gas stations—you name it. Many are marketed as “skill games” to dodge regulation, but they function just like slot machines.
There are now more than 625,000 of these devices scattered across the country, up 7.7% since 2022. Last year, they generated a staggering $30.3 billion for illegal operators, robbing states of roughly $9.5 billion in taxes. Players on these machines have no oversight, no consumer protection, and no guarantee of fair play.
Meanwhile, offshore online casinos have been booming. Based in foreign jurisdictions with little regulation, these sites pulled in $18.6 billion in 2024—almost 38% more than two years ago. The legal U.S. online market is losing ground fast: only 24% of online gamblers now stick entirely to licensed platforms, down from 52% in 2022. Nearly half are splitting their time between legal and illegal sites.
Sports Betting Still Has a Black Market Problem
Sports betting might be legal in much of the U.S. now, but that hasn’t stamped out illegal bookmaking. Americans still placed an estimated $84 billion in bets with unlicensed sportsbooks last year, costing states around $1 billion in lost taxes.
Part of the issue is habit—many bettors have used illegal bookies for years and see no reason to switch. Others are drawn by better odds, looser rules, or more betting options. Whatever the reason, the result is the same: a thriving underground market.
The AGA’s Call for Action
The AGA says the only way to make a real dent in this problem is through stronger enforcement and global cooperation. That means shutting down offshore sites targeting U.S. players, cracking down on unlicensed gaming machines, and making sure consumers understand the risks of betting with illegal operators.
Bill Miller, the AGA’s president, has warned that the damage isn’t just financial. Without regulation, players are left vulnerable to rigged games, fraud, and zero recourse if things go wrong.
How the Study Was Done
The report draws on a survey of 2,454 U.S. adults, combined with public data on gambling markets and the spread of gaming machines nationwide. Together, the findings make one thing clear: unless the U.S. steps up enforcement, illegal gambling will keep eating into the legal market—taking billions with it every year.
