Latest Report Says 74% of Online Gambling Revenue in the US Comes from Illegal Sites
It doesn't exactly paint the picture our best sports betting sites want to see.
The Campaign for Fairer Gambling (CFG), in collaboration with market intelligence platform Yield Sec, released the latest supplement to its USA National Online Gambling Report, published in 2024. Findings in the newest edition state that illegal sites and apps account for 74% of the online gambling revenue generated across the US. Of the $90.1 billion total Gross Gaming Revenue (GGR) recorded in 2024, only $23.0 billion (26%) came from legal, licensed platforms, while $67.1 billion (74%) was earned by illegal, unlicensed operators.
The report concluded that state-level legalization of online gambling does not tend to reduce illegal market activities. However, it increases the total gambling losses per capita, induces more gambling-related harm, and cannibalizes on the state’s tax revenues from legal gambling activities.
The study analyzes states across three categories based on their regulatory status: those with no legal online gambling (e.g., California and Texas), those with legal sports betting only (e.g., New York and Florida), and those with full online gambling legalization, including sports betting and casinos (e.g., Michigan and New Jersey).
Using per-capita Gross Gambling Revenue (GGR) as a percentage of average income, the study found that in states with no legal online gambling, GGR per capita is 0.31% of income. In states with sports betting only, it rises to 0.77%, a 148% increase. Finally, in states with full legalization, the rate increases to 1.12%, a 261% increase in consumer losses compared to states with no legal online gambling.
“Ohio is the alarm bell America needs to hear,” states Derek Webb, Founder of CFG. “Just one year after legalizing online sports betting in 2023, losses for Ohioans had already reached 1.33% of average income per capita to online gambling – the heaviest burden in the country, and more than twice the national average. Across the U.S., we’re not seeing illegal gambling being replaced, we’re simply seeing total consumer losses grow. In states with full legalization, losses are now 261% higher than where there’s no legal online gambling at all. This isn’t progress, it’s escalation.”
The report found that there are 95 legal online gambling operators across the country, compared to 917 illegal operators who exploit the lack of regulation and impose risk on users. Examples include no tax obligations, which allow for lower prices and higher bonuses; access to all 50 states without regulation, with no constraints on content or product offerings; no safe-gambling mechanisms in place; and no advertising standards, allowing for aggressive affiliate marketing and streaming partnerships.
Eighty-eight percent of online gambling-related content exposure now comes from illegal sources, leaving just 12% for licensed operators. This reveals the extent to which illegal enterprises have captured the digital landscape.
Michigan Takes Action to Combat Illegal Online Gaming
On the back of a strong performance in April, with Michigan’s licensed online casino revenues increasing by 33.9% year-on-year, the Michigan Gaming Control Board (MGCB) issued on Friday, June 13, cease-and-desist orders to five unlicensed gambling sites that operated in the state. MGCB Executive Director Henry Williams said: “These illegal sites undermine the integrity of Michigan’s regulated gaming industry and put players at serious risk. We will not tolerate unlicensed gambling operations that exploit Michigan residents”.
