AGA: Americans Illegally Gamble Over Half a Trillion Dollars Annually

  • State governments miss out on $13bn in potential tax revenue each year due to illegal gambling
  • Legal operators also miss out on revenue of $44bn every year
  • Illegal operators control almost 40% of the total US betting market
  • Americans spend about $338bn through illegal iGaming platforms over the course of a year
  • Unregulated gaming machines are widespread and often take advantage of players
Man shuffling cards
A new AGA report shows that Americans spend over half a trillion dollars each year on illegal gambling. [Image: Shutterstock.com]

A “scourge” on society

A new American Gaming Association (AGA) report reveals that Americans illegally gamble about $511bn every year. The report, published on Wednesday, says that state governments miss out on about $13bn of potential tax revenue from this gambling activity each year. Legal operators also miss out on annual revenue of $44bn, which was almost half of the total tribal and commercial gambling revenue last year.

often take advantage of vulnerable people

AGA CEO and president Bill Miller said that unregulated and illegal gambling is a “scourge” on society and these types of offerings often take advantage of vulnerable people, avoid regulations, and rob communities of tax revenue that could be put back into public programs.

Speaking about the extent of illegal gambling that still exists in the US, Miller said: “We have always known that the illegal and unregulated market is expansive, but this report illuminates just how pervasive it is.”

Miller believes that all stakeholders need to work together to root out the unregulated and illegal gambling market.

Interesting figures

According to the AGA report, Americans place $64bn in sports bets with offshore or illegal bookies. Projections for total legal betting handle in the nation this year is $100bn. This means that illegal operators control almost 40% of the total betting market. While sports betting is currently regulated in 36 states and in Washington D.C., the report found that almost half of people who had placed a sports bet over the past year had used an illegal operator to do so.

only six states have legal iGaming up and running

In terms of illegal iGaming, Americans spend about $338bn through these platforms over the course of a year. That would equate to lost tax revenue of almost $4bn. It also means that the illegal iGaming sector in the US is almost three times bigger than the country’s legal market. Currently, only six states have legal iGaming up and running. Almost half of the people who have played table games or slots online in the past year did so with an illegal online casino.

Unregulated gaming machines are still prevalent

Unregulated gaming machines are still an issue in the US, with 580,651 such machines still being present across the nation. Approximately 870,000 regulated gaming machines exist, thus 40% of the total US gaming machines are not regulated.

The AGA commissioned The Innovation Group to conduct the study. It surveyed 5,284 adults in the US, examining their gambling behavior over the past year.

Data also points towards many of these illegal gambling machines as taking advantage of players. The average win rate for slot machine operators in Nevada is 7.2%, compared to illegal machines having a win rate for the house of almost 25%.