Casino lobby says illegal operators control one-third of US gambling activity

David Danzis, Las Vegas Review-Journal on Aug 13, 2025

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Nearly one-third of all gambling activity in the United States is conducted with an illegal operator or at an unlawful site, according to the industry’s main lobbying group.

A new analysis from the Washington, D.C.-based American Gaming Association claims that 31.9 percent of the total U.S. gambling market is controlled by illegal operators. According to the association, gamblers wager $673.6 billion annually with illegal or unregulated operators.

AGA President Bill Miller said such operators are “draining state coffers and putting people at risk,” and he called for a national crackdown.

“Illegal gambling operators are thriving at the expense of American consumers, siphoning billions in tax revenue from state governments, and undercutting the efforts of the legal market,” Miller said in a news release Wednesday.

The trade group said the illegal and unregulated gambling market generated an estimated $53.9 billion in annual revenue for offshore betting rings and unregulated machine operators. As a result, state governments throughout the country are missing out on roughly $15.3 billion in taxes each year.

The new report cites a surge in unregulated online casino play, the proliferation of so-called “skill” gaming machines in bars, restaurants and convenience stores, and continued use of offshore sportsbooks and bookies.

Unregulated gaming machines remain one of the fastest-growing segments, with more than 625,000 operating nationwide, a 7.7% increase since 2022. The AGA report said illicit devices generated an estimated $30.3 billion in revenue last year, costing states $9.5 billion in lost tax revenue.

Illegal casino sites generated $18.6 billion in revenue, up nearly 38% since 2022. The AGA said the percentage of players using only legal online casino sites dropped from 52% in 2022 to 24% this year, while those splitting play between legal and illegal platforms nearly tripled to 49% in the same period.

Illegal sports betting also remains a concern, with Americans wagering an estimated $84 billion with unauthorized operators over the past year. That activity generated $5 billion in revenue for illegal bookmakers and deprived states of $1 billion in tax collections.

While the AGA noted some improvement in shifting players from illegal to legal sports betting options, Miller said more enforcement is needed.

“These bad actors operate in the shadows with zero consumer protections, no responsible gaming obligations, and no economic return to the communities they exploit,” he said. “Combating them requires not only stronger U.S. enforcement, but also continuing to work closely with our international partners to shut down offshore operators and hold them accountable.”

The study was conducted by The Innovation Group on behalf of the AGA. Its findings are based on a survey of 2,454 U.S. adults, along with public data on legal gaming markets and state gaming machine operations.

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