WASHINGTON, D.C. — A new analysis from the American Gaming Association (AGA) reveals that illegal and unregulated gambling continues to siphon off a massive share of the U.S. gaming economy, accounting for $673.6 billion in annual wagers—nearly one-third (31.9%) of the total market.
Despite growth in the legal sector, the illegal market has surged 22% since 2022, fueled by:
- Rising illegal iGaming activity
- Proliferation of unregulated skill machines
- Persistent offshore sports betting
Economic Impact
| Category | Annual Revenue | Tax Losses |
|---|---|---|
| Illegal Gambling Market | $53.9 billion | $15.3 billion |
| Unregulated Skill Machines | $30.3 billion | $9.5 billion |
| Illegal Sports Betting | $5 billion | $1 billion |
“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,” said Bill Miller, AGA President and CEO. “It’s time for a national crackdown.”
Key Findings by Segment
Unregulated Skill Machines
- Over 625,000 machines now operate in bars, restaurants, and convenience stores
- Revenue up 7.7% since 2022
- No oversight, no consumer protections, and $9.5B in lost state taxes
Illegal iGaming
- Online slots and table games generated $18.6B, up 38% since 2022
- Only 24% of iGamers now use exclusively legal sites, down from 52%
- Dual usage (legal + illegal) has tripled in three years
Illegal Sports Betting
- Americans wagered $84B with illegal bookies and offshore sportsbooks
- Illegal sportsbooks’ market share dropped from 36% to 24%
- Still, 1 in 10 bettors use illegal sources exclusively
“These bad actors operate in the shadows with zero consumer protections, no responsible gaming obligations, and no economic return to the communities they exploit,” Miller added. “Combating them requires stronger U.S. enforcement and international cooperation.”
Explore Legal Gaming by State
Visit the AGA’s State of Play Map for a comprehensive breakdown of licensed gaming activity across the U.S.
Methodology
The study was conducted by The Innovation Group for the AGA, based on a survey of 2,454 U.S. adults, combined with public data on legal gaming revenues and machine markets.
