$67 Billion in Revenue: The Scale of Unregulated Online Gambling Sites Last Year
Unregulated Online Gambling Sites Generated $67 Billion in Revenue Last Year
- Illegal online gambling operations continue to thrive in the US
- Unregulated online gambling growth outpaced legal iGaming in 2024
- Some say more work is needed to crack down on illegal internet gambling
A recent study has found that unregulated online casino websites and sportsbooks continue to dominate internet gambling in the United States, despite the expansion of legal gambling options in various states.
The analysis was conducted by Yield Sec, a Denver-based gaming consultancy, commissioned by the Campaign for Fairer Gambling. Researchers presented alarming findings regarding the market dynamics.
The report indicated that while revenue from legal online gambling grew by 36% last year, the unregulated market—which includes offshore casino websites and sportsbooks—expanded at nearly double that rate, achieving a 64% growth in gross gaming revenue (GGR).
It was estimated that US gamblers lost a staggering $90.1 billion online last year. Of these losses, the unregulated industry claimed around 74%, equating to approximately $67 billion. Additionally, the study revealed that nearly 90% of American consumers have encountered illegal gambling content through various online channels.
Even in states where iGaming and online sports betting are legally permitted, the unregulated market showed resilience. The research pointed out that unlicensed online casinos and sportsbooks, not facing regulatory burdens or taxes, often attract players offering better promotions and favourable odds.
Protection in Gambling
However, players engaging with these unregulated platforms are not afforded the same consumer protections as their legal counterparts. Important guarantees such as ensuring that winnings are paid and withdrawals processed are largely absent within unregulated environments.
Call to Action
The Campaign for Fairer Gambling, spearheaded by poker luminary Derek Webb, advocates for comprehensive gambling reform initiatives to fortify online regulations, protect economic interests, and curb gambling-related adversities. Webb insists that the findings of the Yield Sec report expose the flaws in the current approach to legalizing online sports betting and casinos without addressing the illegal gaming sector.
“Legalizing internet gambling without a dedicated strategy to tackle the illegal sector has been disastrous,” Webb stated. “Anyone claiming that merely legalizing gambling will eradicate illegal operations should reconsider their stance.”
Supporters of legalized sports betting and online casinos, including the American Gaming Association (AGA), argue that regulatory measures curtail illegal gambling. However, the Yield Sec review contests this view, with the company’s founder, Ismail Vali, asserting that the responsibility is shared across several sectors.
“It’s crucial to understand that we cannot solely blame regulators. Their focus is on supervising licensed operations, not pursuing unlawful activities by unlicensed entities. The issue of illegal gambling requires a collective effort involving operators, law enforcement, media entities, social platforms, and governmental agencies,” Vali added.
Defining Illegal Gambling
It’s important to note that the study regarded illegal gambling as encompassing controversial online sweepstakes sites. Critics argue these platforms disguise themselves as free-to-play games while conducting illegal gambling practices. Furthermore, prediction markets like Kalshi that offer sport contracts were also classified as prohibited gaming avenues.
Illicit operators are capitalizing on various products across states, including casino games and popular prediction markets. They even incorporate betting on significant events like elections and tariffs, alongside sports and finance.
Summary
The study illuminates the continuing allure of unregulated online gambling even amid increased legal gaming options. Stakeholders in the industry must collaborate to create robust frameworks that protect consumers and curb illegal gambling syndicates. Lawmakers and regulators are urged to revisit their strategies to confront illegal operations actively, ensuring the integrity and security of the gaming landscape in Australia.
