- Illegal online gambling operations continue to thrive in the US
- Unregulated online gambling growth outpaced legal iGaming in 2024
- Some say more work is needed to crack down on illegal internet gambling
A new study finds that unregulated online casino websites and sportsbooks continue to dominate internet gambling despite legal expansion in the United States.
Yield Sec, a Denver-based gaming consultancy, was recently commissioned by the Campaign for Fairer Gambling to study the legal and illegal online gaming market in the United States. Yield Sec researchers found startling data points.
The report determined that while revenue in the legal online gambling space grew 36% last year, as Rhode Island joined six other iGaming states and more sports betting states came online, the offshore, illegal market continued to prosper. Gross gaming revenue (GGR) from illegal online gaming surged almost twice as fast at 64% growth.
Yield Sec estimated that US gamblers lost $90.1 billion online last year. Of those losses, the unregulated industry claimed 74% of the revenue, or about $67 billion. The study additionally found that nearly nine in 10 US consumers have been exposed to illegal gambling content on the various media they consume.
Even in states where iGaming and online sports betting are permitted, Yield Sec found that the unregulated online market continued to thrive.
Researchers reported that without being subjected to regulations and taxes, the unlicensed online casino and sportsbook market attracts players from the legal marketplace with better promotions and odds. While that might be true, players who utilize unregulated gaming websites have no consumer protections such as guarantees that their winning bets will be paid and account withdrawals will be executed.
Call to Action
The Campaign for Fairer Gambling, led and funded by poker pro and table game innovator Derek Webb, seeks to advance evidence-based gambling reform to protect online borders, defend the economy, and minimize gambling harm. Webb says the Yield Sec report highlights how the legalization of online sports betting and casinos in certain states has been misguided.
US legalization of internet gambling without a game plan to tackle the illegal sector has been an unmitigated disaster,” Webb declared. “Any pundit, commentator, legislator, regulator, lawyer, or lobbyist selling legalization alone as a cure for illegal online gambling should be ashamed.”
Proponents of legalizing sports betting and online casinos, including the American Gaming Association (AGA), have long campaigned that regulation hurts illegal operations. Yield Sec reports that’s been far from the case, but the company’s founder and CEO, Ismail Vali, says the blame can be passed around.
“Let’s not pin this on gambling regulators alone. Their job is to supervise the licensed industry, not to chase criminals who never applied for a license. Illegal gambling is everyone’s problem — operators, law enforcement, media companies, social platforms, and governments all have a role to play,” Vali said.
Sweeps, Prediction Markets
It’s worth noting that the Yield Sec review considered illegal gambling to include controversial online sweepstakes websites that critics say are masquerading as free-to-play platforms but are illegal gambling businesses. Online prediction markets like Kalshi that offer sports contracts were also included as prohibited gaming platforms.
“Illegals feature all products in all states, including casino and popular predictor marketplaces which illegals have hijacked to feature events such as election and tariffs betting alongside sports and financials,” the Yield Sec presser read.
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