The national trade group representing the US casino industry, the American Gaming Association (AGA), released a new analysis, estimating the size of the illegal gambling sector in the United States.
The new study, conducted by The Innovation Group for the Association, warns that the illegal gambling sector in the country has grown by a two-digit percentage in the last few years.
Illegal gambling is on the rise across the U.S.
A survey of 2,454 US adults across the country helped determine certain trends in illegal and legal gambling.
Concerningly, per the new report, Americans wager $673.6bn every year with illegal gambling operators and this includes illegal betting firms, illegal online gambling and unregulated skill machines.
This revenue is diverted from licensed and regulated operators and deprives communities and states of vital resources which could be used for public safety, education and infrastructure, among other important projects.
The newly released report by AGA estimates that the revenue of illegal gambling operators annually is $53.9bn, a figure that translates to some $15.3bn in losses in terms of taxes for states and communities across the country.
According to AGA, the illegal gambling market across the United States has grown by 22% since its last report, which was issued in 2022.
This expansion of unregulated gambling is the result of the rapid growth of illegal iGaming operators, the persistent presence of illegal sports betting and the increasing use of unregulated skill machines.
"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 – but illegal operators still account for nearly one-third (31.9%) of the total U.S. gaming market," the Association explained in a statement.
Black market bookies, iGaming firms and skill games generate billions in annual revenue
Illegal sports betting represents a major share of the illegal gambling sector.
The AGA estimates that Americans bet $84bn with illegal or offshore betting companies in the last year alone.
Those providers recorded $5bn in revenue, resulting in $1bn in tax losses.
Equally as concerning is the growing presence of skill-based gaming. The report estimates that there are some 625,000 skill machines across the country.
This particular illegal gambling activity has recorded an increase of 7.7% since 2022, and according to AGA, generated $30.3bn in revenue, resulting in $9.5bn in lost taxes.
Illegal iGaming has also grown significantly since 2022, the AGA said, increasing by nearly 38% to $18.6bn in annual revenue from illegal table games and slots.
Moreover, the new report explains: "Most concerning, the share of iGamers who play only on legal sites fell from 52% in 2022 to just 24% today, while the share using both legal and illegal sites soared to 49%, nearly tripling in just three years."
Bill Miller, AGA's President and CEO, said about the newly released analysis: "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."
What's more, he said that the time has come for a "national crackdown on the pervasive illegal market that is draining state coffers and putting people at risk."
Finally, Miller warned that illegal gambling operators do not pay any taxes or bring economic return, do not comply with responsible gambling and operate "in the shadows with zero consumer protections."
