Illegal Gambling Hits $97B in the US: Rogue Operators Are Having a Laugh

The United States finally has a fully-regulated gambling market, or at least the majority of states are now offering sports betting online, with iGaming attempting to expand as well.

Illegal Gambling Just Shy of $100B in the US

Despite all of this, argues Three Card Poker founder, Derek Webb, the offshore gambling market is continuing to sustain itself and generate tens of billions worth of dollars in revenue. 

Webb himself is one of the early gambling pioneers, having himself owned Three Card Poker and sold it back in 2011 when he finally retired, and then spent a decade to lobby policymakers to reduce the fixed-odds betting terminal maximum betting limit from £100 to £2.

Webb’s Campaign for Fairer Gambling, has also commissioned a new report by Gaming Compliance International, and has now presented the results in a new and staggering discovery, with 77% of the market, based on the report’s findings, controlled by the offshoremarket.

Yield Sec pins the total valu eof the US gambling market at about $125.6 billion whereas $97.4 billion are generated through operators that are not licensed in the state shwere they operate. 

Even more concerningly, a previous estimate by the same company put the illegal gambling market at 67.1% billion a year prior – menaing that the illegal market has grown by the staggering and almost incomprehensible 45.2%. 

Of course, the numbers are hard to pinpoint. The American Gaming Association (AGA), the trade group representing the interests of licensed gambling companies in the United States, has pinned the illegal gambling market at $53.9 billion, evidently a significant difference from the number cited by the Gaming Complaince International Report.

Why such a gap in the reporting exists is an interesting question, but perhaps one explained by something simple – methodology. The AGA reaches out to people and asks them directly, extrapolating from sizeable samples as to what the overall market balance is.

On the other hand, Gaming Compliance International relies on keyword sweeps to check every gambling platform that is able to reach customers across the United States, with the company deploying machine learning to try and determine what the value of the illegal gambling market is.

No Methodology Is Flawless, But the General Trend Is Evident

Of course, neither method is perfect or flawless, but they provide a blueprint, and with both putting the size of the market in the billions of dollars, the problem is, at the very least, tangible and well-documented. 

While Gaming Compliance International’s figures have been put in question in the past, Webb himself is fairly comfortable with the numbers when it comes to their accuracy. 

He argues that he has seen the company repeatedly produce accurate estimates of licensed and regulated markets, thus trusting the company’s estimates of the illegal market. 

Of course, Gaming Compliance International is relying on extrapolation, as the illegal gambling market is too disparate, and collecting information from every single platform that targets regulated markets without a license is simply not possible. 

What remains a fact, though, is that the illegal gambling market continues to gain ground despite the US’s success story in regulating its gambling activities at an unprecedented scale since 2018.