Americans are still pouring vast sums into illegal and unregulated gambling, despite the growth of the licensed market. According to fresh data, total wagers with these operators have now hit $673.6bn a year. The scale of the problem, and the tax revenue it drains from communities, is pushing the issue higher on the industry’s agenda.

  • The new American Gaming Association study shows illegal and unregulated gambling now accounts for $673.6bn in annual wagers. That equals $53.9bn in revenue for unlicensed operators and $15.3bn in lost state tax revenue. Illegal and unregulated gambling still makes up 31.9% of the entire US gaming market.

  • Market growth has been fuelled by a spike in illegal iGaming, the spread of unregulated “skill” machines, and ongoing offshore sports betting. While legal sports betting has gained ground, illegal operators continue to capture a third of the US market. The illegal market has grown 22% since 2022.

  • Unregulated “skill” machines remain a major problem, with 625,316 now in operation across the US. These machines generate $30.3bn in annual revenue and cost states $9.5bn in tax revenue. They are widely found in bars, restaurants, and convenience stores, with no regulatory oversight.

  • Illegal sports betting still draws heavy activity, with Americans wagering $84bn annually through illegal bookmakers and offshore sites. These operations generate $5bn in revenue and deprive states of $1bn in taxes. While the share of bettors using only illegal channels has fallen from 35% to 24%, one in ten still bet exclusively with unlicensed providers.

  • Illegal iGaming has seen the sharpest rise, pulling in $18.6bn in annual revenue – up nearly 38% since 2022. The proportion of players using only legal sites has dropped from 52% to 24%, while those using both legal and illegal platforms have nearly tripled to 49%. This shift shows growing crossover between regulated and illicit online play.

  • AGA president and CEO Bill Miller said: “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.” He called for stronger US enforcement and more cooperation with international regulators to curb offshore activity.

  • The research was carried out by The Innovation Group for the AGA, surveying 5,284 US adults about their gambling habits. Public data on the legal US gaming market and state machine markets was also factored in. Findings point to a continued need for coordinated enforcement and consumer awareness to address the scale of illegal and unregulated gambling.

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