Just recently AGA (American Gaming Association) released a report to observe the “dark side” or the iGaming market in the United States. In 2022, the American Gaming Association (AGA) launched a landmark effort to measure the size of the illegal and unregulated gaming market in the United States. At that time, our research revealed that consumers wagered more than half a billion dollars with illegal and unregulated operators, costing state governments billions in lost tax revenue.

The main concerns are not just towards tax revenue loss, but a breach to user’s security, responsible gaming and age verification (involving under-aged people in gambling and betting activities).

Some numbers to observe:

The American Gaming Association report estimates that Americans wager $510.9 billion annually with illegal and unregulated operators – gobbling up $44.2 billion in lost legal industry revenue and $13.3 billion in foregone state tax revenue.

Sports Betting

Approximately $63.8 billion is handled by illegal bookies and offshore sites, resulting in about $3.8 billion lost to the legal industry and $700 million in lost taxes.
That amounts to nearly 40% of the U.S. sports betting market being dominated by illegal operators.

iGaming (Online Casino Games)

Illegal iGaming accounts for $337.9 billion in wagers, leading to roughly $3.9 billion in tax revenue losses.
The illegal iGaming market dwarfs the legal one (~$5 billion in 2022), being almost three times larger.
Nearly 48% of Americans who played online slots or table games in the past year reported using illegal sites.

Based on above, we can make several in-between conclusions:

Illegal/unregulated operators command a massive slice of attention & spending
Despite legalization efforts, the illegal gaming market still captures roughly one-third of consumer dollars across sports betting, iGaming, and unregulated machines. These platforms siphon away tax revenue and distract significant portions of the consumer base.
Consumer misperception helps fuel the black market
Many bettors don’t know they’re playing illegally – some illegal platforms convincingly impersonate legal sites. This confusion perpetuates engagement with high-risk operators.
Legalization has made progress – but gaps remain
Legal alternatives are drawing users away: the share of bettors exclusively using illegal operators is decreasing. Yet, illegal operators still hold a notable presence, especially in unregulated segments and newer channels like crypto casinos.
Regulation alone isn’t enough without enforcement & education
Weak enforcement, especially around machines and crypto platforms, combined with lack of consumer awareness, undermines legalization efforts. Educating users and enhancing enforcement are critical.

Dealer’s Last Word

The AGA’s report and latest data from a number of different sources, confirm that illegal and unregulated operators remain a formidable competitor to the legal market, not just in terms of cash flow, but attention and brand presence. While legality provides safety, tax revenue, and consumer protection, it must be matched with robust enforcement, education, and innovation to truly reclaim the market.
Aside from above, a solid number of users still value their privacy way more than potential harm and prefer unregulated brands due to less data to collect, faster and discreet (usually crypto-involving) cash-in and cash-out, sometimes better odds.

I believe that in order to minimize the harm from illegal iGaming, the measures need to hit three major directions:enforcement, accessibility, and player awareness:

Target offshore operators and increase penalties for illegal advertising
- Hit illegal affiliates and influencers who promote unlicensed brands
- Work with ISPs and payment processors to block access and financial flows to black-market platforms;
Make the legal market more competitive
- Simplify licensing processes,
- Lower down tax rates in high-tax states,
- Allow wider product ranges and cover more states into legal area (and do it faster!);
Educate and shift player behavior
- Clear public campaigns highlighting the risks of illegal play,
- Partnership with banks & payment apps to fast up the cash-in and cash-out for legal brands,
- Constant data monitoring and responding to show the value of above measures.

Final Note

For those looking to navigate the legal iGaming and betting market while avoiding the risks of unregulated platforms, our US Betting Guide offers a comprehensive breakdown of licensed operators, regulatory frameworks, and strategies to promote legitimate services. If you’re a marketer or business owner aiming to grow your presence in this space, consider leveraging tools like Clickadu to start buying targeted traffic for your legal betting platform. As the industry evolves, aligning with regulated solutions and ethical traffic acquisition methods will be key to building trust and sustainability in the long term.

Sources:
AGA – Report on illegal iGaming
Financial times – Crypto casino takings top $80bn as gamblers bypass blocks
The Guardian – Report on Super Bowl’s illegal bets