New AGA analysis reveals illegal gaming remains nearly a third of the U.S. market

Illegal operators cost states $15bn in lost tax revenue.

Press release. – A new analysis from the American Gaming Association (AGA) finds that Americans wager a total $673.6bn annually with illegal and unregulated gambling operators, diverting activity away from licensed operators and denying communities critical resources that fund infrastructure, education, and public safety.

Driven by a sharp rise in illegal igaming, expanding use of unregulated skill machines, and persistent illegal sports betting, the illegal market has grown 22 per cent since AGA’s last report in 2022. 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 per cent) of the total U.S. gaming market.

The illegal and unregulated gambling market generated an estimated $53.9bn in annual revenue for offshore betting rings and unregulated machine operators, robbing state governments of $15.3bn in taxes each year.

Bill Miller, AGA president and CEO, 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. It’s time for a national crackdown on the pervasive illegal market that is draining state coffers and putting people at risk.”

Unregulated “Skill” machines findings

Unregulated machines remain one of the fastest-growing threats to legal gaming, with more than 625,000 machines now operating across bars, restaurants, and convenience stores, a 7.7 per cent increase since 2022. These machines generated $30.3bn in revenue, and cost states $9.5bn in lost tax revenue. With no regulatory oversight, these machines pose serious risks to consumers and communities alike.

Igaming findings

Illegal online slots and table games reached $18.6bn in revenue, up nearly 38 per cent since 2022. Most concerning, the share of igamers who play only on legal sites fell from 52 per cent in 2022 to just 24 per cent today, while the share using both legal and illegal sites soared to 49 per cent, nearly tripling in just three years. Despite this growth, illegal operators hold a smaller share of the total U.S. igaming market than they did three years ago.

Sports betting findings

Americans wagered an estimated $84bn with illegal bookies and offshore sportsbooks in the past year, generating $5bn in revenue and causing $1bn in tax losses. Compared to 2022, the share of sports bettors exclusively using illegal sites fell by a third and illegal sportsbooks’ share of the total U.S. sports betting market fell from 36 per cent to 24 per cent. One in ten sports bettors still wager exclusively with illegal sources.

“These bad actors operate in the shadows with zero consumer protections, no responsible gaming obligations, and no economic return to the communities they exploit,” added AGA‘s president. “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.”