The report states that illegal wagering robs state governments of $13.3bn in tax revenue annually.
US.- A new report commissioned by the American Gaming Association (AGA) has estimated that Americans gamble an estimated $511bn each year with illegal and unregulated sportsbooks, igaming websites and “skill games.”
The report states that such illegal wagering robs state governments of $13.3bn in tax revenue annually, nearly $2.5bn more than what licensed operators generated in 2021 ($11.7bn). It also costs the legal gaming industry $44.2bn in annual revenue, or nearly half of the $92bn in combined commercial and tribal revenue reported in 2021.
AGA president and CEO Bill Miller said: “Illegal and unregulated gambling is a scourge on our society, taking advantage of vulnerable consumers, skirting regulatory obligations and robbing communities of critical tax revenue for infrastructure, education and more.
“We have always known that the illegal and unregulated market is expansive, but this report illuminates just how pervasive it is.”
The study was conducted by The Innovation Group and is based largely on a survey of 5,284 U.S adults, examining their past-year gambling behaviours with both legal and illegal operators as well as observations of unregulated gaming machines. It incorporates publicly available data on the size of the legal gaming market and certain state gaming machine markets.
AGA’s report estimates that Americans wager $63.8bn with illegal bookies and offshore sites at a cost of $3.8bn in gaming revenue and $700m in state taxes. With Americans projected to place $100bn in legal sports bets this year, these findings imply that illegal sportsbook operators are capturing nearly 40 per cent of the U.S. sports betting market.
While the numbers are significant, they also demonstrate Americans’ movement to the regulated market with legal sports betting’s expansion to 36 states and the District of Columbia.
The report also found that 49 per cent of past-year sports bettors have placed a bet with an illegal operator. Previous AGA research shows that more than half of Americans that bet on sports with illegal operators believe they are wagering legally.
Americans wager an estimated $337.9bn with illegal igaming websites, with a loss of $3.9bn in state tax revenue. With $13.5bn in estimated revenue, the illegal iGaming market in the U.S. is nearly three times the size of the legal U.S. igaming market, estimated to be $5bn in 2022.
With igaming only legal in six states, nearly half of Americans (48 per cent) that have played online slots or table games in the past year have played with illegal online casinos.
Unregulated “Skill Machines”
Unregulated gaming machines also continue to proliferate, with an estimated 580,651 unregulated machines in the U.S. With 870,000 regulated machines in casinos and slot routes, that means 40 per cent of all gaming machines in the US are unlicensed.
Based on state regulatory data for similar machines, the operator win percentage on unregulated gambling machines is significantly higher than legal casino slot machines. During the past 12 months, slot machines in Nevada have a 7.16 per cent win rate, compared to a nearly 25 per cent estimated win rate for unregulated machines ,demonstrating how unregulated machines take advantage of customers.
“All stakeholders – policymakers, law enforcement, regulators, legal businesses – must work together to root out the illegal and unregulated gambling market. This is a fight we’re in for the long haul to protect consumers, support communities and defend the law-abiding members of our industry,” concluded the report.