The American Gaming Association (AGA) has released new figures highlighting the scale of illegal and unregulated gambling in the United States. The analysis finds Americans now wager $673.6 billion each year with unauthorised operators, an activity that diverts funds away from licensed businesses and results in the loss of critical tax revenues for infrastructure, education, and public safety.
Market Growth
The illegal gambling market has expanded by 22% since 2022, driven by rapid increases in unregulated iGaming and the proliferation of skill machines. Despite the growth of the legal market, which has led to a declining share for illegal operators in sports betting and iGaming, the unregulated market still represents nearly a third (31.9%) of all U.S. gaming revenue. Illegal operations generated an estimated $53.9 billion in annual revenue and cost state governments $15.3 billion in taxes.
Key Findings
Unregulated skill machines have seen notable growth, with over 625,000 machines now operating in venues nationwide—a 7.7% increase since 2022. These machines contributed $30.3 billion in revenue, resulting in $9.5 billion in lost state taxes. The AGA warns that these unregulated devices present significant risks due to the lack of oversight and consumer protections.
In iGaming, illegal online slots and table games generated revenues of $18.6 billion, up almost 38% from 2022. The proportion of players using only legal sites has sharply decreased, while those using both legal and illegal platforms nearly tripled over three years. Additionally, illegal sports betting accounted for $84 billion wagered, producing $5 billion in revenue and $1 billion in lost taxes, though exclusive use of illegal sites by bettors has declined compared to 2022.
AGA President and CEO Bill Miller said:
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 U.S. enforcement, but also continuing to work closely with our international partners to shut down offshore operators and hold them accountable.”
The AGA’s analysis underlines significant challenges for regulators and policymakers as illegal and unregulated gambling continues to grow and divert resources away from legal industry operators and local communities.
