- Legal States
Julie Moraine November 30, 2022 3 min read
AGA Worried with the Size of Illegal Betting and Gaming Market
A survey of 5,284 US adults conducted on behalf of the American Gaming Association (AGA) revealed that 49% of the bettors who wagered in the past year have placed a bet with an illegal operator and 48% of online slots or table game players have played with an illegal online casino.
Stunned at the size of the illegal gaming market in the US, the AGA published a report titled “Sizing the Illegal and Unregulated Gaming Markets in the US,” estimating that Americans spend $511 billion each year gambling with illegal sportsbooks, online casino websites and unregulated gaming machines.
Commenting on the findings, AGA president and chief executive officer Bill Miller raised concerns about the threat posed by illegal operators to the regulated market.
“Illegal and unregulated gambling is a scourge on our society,” Miller said, outlining that it is “taking advantage of vulnerable consumers, skirting regulatory obligations and robbing communities of critical tax revenue for infrastructure, education and more,” convinced that the report shows “just how pervasive” the illegal market is.
The report estimates that due to illegal gambling state governments have been robbed of $13.3 billion in annual tax revenue, $2.5 billion more than what legal operators generated in 2021, siphoning $44.2 billion in annual revenue from the legal gaming industry – almost half of what combined commercial and tribal revenue was last year.
AGA’s report estimated that US bettors spend $63.8 billion wagering with illegal bookmakers and offshore websites, depriving legal sportsbooks of $3.8 billion in gaming revenue and states of $700 million in taxes.
AGA further claimed that illegal operations are projected to capture nearly 40% of the US sports betting market in 2022, based on a $100 billion total market projection.
Previous AGA research showed that more than half of those who wager with illegal operators or websites believe they are doing it legally.
Online Casino Gaming
AGA stated that Americans wager an estimated $337.9 billion with illegal iGaming websites, resulting in a loss of $3.9 billion in state tax revenue. Estimating the size of the illegal iGaming market of $13.5 billion annually, the gaming industry representative body concludes that it is nearly three times the size of the legal iGaming market estimated to be $5 billion this year as currently there are only six states in which online casino gaming is legal.
The survey which was conducted by The Innovation Group examines past-year gambling behavior with both legal and illegal operators of the participants and incorporates publicly available data on the size of the legal US gaming market.