The study, conducted by The Innovation Group on behalf of AGA, surveyed 2,454 U.S. adults about their gambling behavior over the past year. Researchers also monitored unregulated slot machines, while integrating public data on the legal U.S. gaming market and state-level slot activity.
$15 Billion in Lost Tax Revenue
Illegal gambling is costing U.S. states an estimated $15 billion in annual tax revenue, according to a new analysis by the American Gaming Association (AGA). The report found that U.S. bettors wager roughly $673.6 billion each year on the illegal market, undermining licensed operators and diverting funds away from state infrastructure.
The study, conducted by The Innovation Group on behalf of AGA, surveyed 2,454 U.S. adults about their gambling behavior over the past year. Researchers also monitored unregulated slot machines, while integrating public data on the legal U.S. gaming market and state-level slot activity.
Illegal Market Up 22% in Three Years
Since AGA’s last report in 2022, the U.S. illegal gambling market has grown 22%, spanning online casinos, slot machines, and bookmakers. While legal gambling revenue has grown even faster, unregulated operators still account for nearly 32% of the national market.
The illegal and unregulated segment generates about $53.9 billion annually for offshore operators, while depriving states of approximately $15.3 billion in tax revenue.
AGA President and CEO Bill Miller expressed frustration at the findings:
“It’s time for a national crackdown on illegal gambling that is draining state treasuries and jeopardizing public safety.”
Fewer Players Sticking to Legal Sites
Illegal online slots and table games produced $18.6 billion in revenue for offshore operators in 2024, up 38% since 2022. The growth is tied to a dramatic shift in consumer behavior: the share of gamblers using only regulated sites dropped from 52% to 24% over three years.
Meanwhile, those using both legal and illegal platforms surged to 49%, nearly tripling. Still, the overall market share of illegal operators is smaller today than it was three years ago.
Unregulated Slot Machines a Key Threat
The number of unregulated slot machines in the U.S. has risen 7.7% since 2022, reaching 625,000 units. These machines generate an estimated $30.3 billion annually, while stripping states of $9.5 billion in tax revenue. AGA identifies their rapid spread in public venues as one of the greatest threats to the regulated U.S. gaming sector.
Illegal Bookmakers Losing Ground
In 2024, U.S. gamblers wagered about $84 billion with illegal bookmakers, resulting in $5 billion in winnings and $1 billion in lost tax revenue. Over the past three years, the share of players using illegal bookmakers has fallen by one-third, reducing their market share in U.S. sports betting from 36% to 24%.
Still, one in ten American gamblers continues to bet exclusively on unlicensed platforms.
AGA’s Advocacy Role
As the national trade body for the industry, AGA promotes the licensed sector by advocating for favorable policies and a strong business environment. Its membership includes commercial and tribal casinos, sportsbooks, online operators, and suppliers, representing a $329 billion industry supporting 1.8 million jobs nationwide.
The organization’s “State of Play” map offers a state-by-state breakdown of regulated casinos across the U.S.
Europe Faces Bigger Black Market Problem
While illegal operators capture about one-third of U.S. gambling turnover, the figure exceeds 50% in Europe. In an interview with SiGMA News, European Gaming and Betting Association (EGBA) Secretary General Maarten Heijers voiced serious concerns over the region’s growing black market, stressing the need for smarter regulation and more coordinated enforcement.
