American Gaming Association estimates illegal wagers at $500+ billion in USA

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A new report commissioned by the American Gaming Association and produced by the Innovation Group has estimated the US illegal gambling market impacting $44.2bn per year to the legal operators with players betting more than half a trillion dollars on unregulated sites and machines. The state governments lost $13.3bn in tax revenue annually.

These illegal and unregulated gambling operators do not follow any regulations related to financial solvency, anti-money laundering, and know-your-customer requirements that are applicable to legal operators.

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”.

The reports estimates 580,000 unregulated gambling machines across the country in bars, convenience stores, illegal gambling halls and other venues, amounting to 40% of all gaming machines in the U.S. as unlicensed.

Several US states have legalised betting in recent times including New York. In one month since legalisation in January punters have waged more than $2 billion in bets bringing $80 million in tax revenue to New York government.

Only 52% of online casino players used legal online casino sites. Meanwhile, 30% of players only used illegal channels, while 18% of players used both legal and illegal sites. The survey responders were all aged 21 years or older.

“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,” said AGA President and CEO Bill Miller.

The average of last-twelve month and full year 2022 estimated in-person slots and table games revenue for all casinos in the U.S. is $79.6 billion, stated the report.

The report stated that Americans wager an estimated $337.9 billion with illegal iGaming websites, resulting in a loss of $3.9 billion in state tax revenue. Estimating the size of the illegal iGaming market of $13.5 billion annually, the gaming industry representative body concludes that it is nearly three times the size of the legal iGaming market estimated to be $5 billion. Currently only six states permit iGaming that includes online casino games
like poker, slots or blackjack.

AGA noted that while offshore sites have succeeded in muddying the waters in internet search results, the law is clear: it is a crime to participate in the business of illegal gambling. Illegal offshore gambling is something even faced in India and other countries.