US players gamble $511bn per year with unlicensed operators, report finds

| By Daniel O'Boyle
A new report commissioned by the American Gaming Association has estimated the US illegal gambling market to be worth $44.2bn per year, with players betting more than half a trillion dollars on unregulated sites and machines.
Illegal gambling

The report was produced by the Innovation Group and examined three sectors of illegal or “grey market” gambling: sports betting, online casino and “skill gaming” machines.

The Innovation Group conducted a survey of 5,284 US adults, asking questions about “their overall gambling habits for both land-based and interactive and regulated and unregulated gambling”. Players’ spend with regulated sites was then benchmarked against official figures in order to understand how players may under- or over-report their spend, and this was then used to adjust figures for unregulated spend.

This was combined with baseline figures based on public reporting, census data and other sources in order to determine the size of the unlicensed market.

Illegal gambling: “a scourge on society”

In total, the report found that players gambled $510.9bn per year using unregulated sites or machines, leading to revenue of $44.2bn.

“Illegal and unregulated gambling is a scourge on our society, taking advantage of vulnerable consumers, skirting regulatory obligations and robbing communities of critical tax revenue for infrastructure, education and more,” AGA president and CEO Bill Miller said. “We have always known that the illegal and unregulated market is expansive, but this report illuminates just how pervasive it is.”

Unlicensed online casino

In terms of the amount bet, the largest illegal gambling sector was online slots and table games. Players are estimated to stake $337.9bn annually on unlicensed online slot and table games, with the vertical being permitted in only a handful of US states.

These games then produce $13.5bn in revenue for unlicensed operators.

In total, 52% of online casino players only used legal online casino sites. Meanwhile, 30% of players only used illegal channels, while 18% of players used both legal and illegal sites.

Breaking illegal online casino revenue down by region, players in the south – in which there are no states where online casino is legal – staked the most on online casino, at $150.8bn. This led to $6.0bn in revenue.

For the midwest, the revenue total was $3.7bn on stakes of $91.8bn. In the west, revenue was $2.0bn on stakes of $49.2bn.

In the northeast – in which legal online casino is more common – illegal revenue was lowest at $1.9bn, on stakes of $46.1bn.

Read the full story on iGB North America

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