AGA Report: US Black Market Gambling Hits $673.6bn Annually

The American Gaming Association (AGA) has released a new report estimating that Americans wager $673.6bn each year through unregulated gambling channels, marking a 22% growth in the black market since 2022. The unregulated sector now accounts for 31.9% of the total US gambling market, generating $53.9bn in annual revenue and causing an estimated $15.3bn loss in state gaming tax revenue.

While the figures highlight a serious ongoing challenge, the AGA notes that illegal operators’ share of both iGaming and sports betting has declined since 2022.

iGaming Leads the Illegal Market

The report identifies online slots and table games as the largest black market segment, with $466.2bn wagered annually. This generates an estimated $18.6bn in revenue — up 38% since 2022 — and results in a $4.8bn tax revenue shortfall.

The share of players using only legal iGaming sites has fallen sharply from 52% in 2022 to just 24% today, while the proportion using both legal and illegal platforms has tripled to 49%.

Illegal Land-Based Gambling

Illegal land-based play records a smaller handle than iGaming at $123.4bn annually, but generates the highest sector revenue at $30.3bn. This segment also accounts for the largest tax loss — $9.5bn per year.

A key threat identified in the report is the rise in unregulated gaming machines, now exceeding 625,000 units nationwide, a 7.7% increase since 2022. These machines alone account for nearly all revenue in the illegal land-based sector.

Sports Betting Sees Declining Black Market Share

Illegal sports betting is estimated at $84bn annually, producing $5bn in revenue and costing $1bn in lost tax revenue. The sector has seen its black market share fall from 36% in 2022 to 24%, though one in ten US bettors still wager exclusively with unlicensed sportsbooks.

AGA’s Call to Action

Bill Miller, President and CEO of the AGA, said:

“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. It’s time for a national crackdown on the pervasive illegal market that is draining state coffers and putting people at risk.

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

Related news: New York Mobile Sports Betting Sees Double-Digit Gains in July