Illegal Online Gambling: The Unseen Calamity in America’s Betting Landscape

Introduction to the Gambling Report

On June 13, 2025, the Campaign for Fairer Gambling (CFG) unveiled a striking revelation from its supplement to the USA National Online Gambling Report 2024. It highlighted that a staggering 74% of total gross gambling revenue (GGR) in the United States is attributed to illegal online gambling activities. This report, commissioned by CFG and produced by the online market intelligence platform Yield Sec, sheds light on the urgent need for reform in the gambling industry, especially concerning illegal operations.

State-by-State Analysis of Online Gambling

The CFG report categorizes American states into three distinct groups based on their online gambling laws:

1. States with No Legal Online Gambling:
   These include giants like California and Texas, which currently do not permit any form of online betting. As expected, the burden of gambling losses here is the lowest.

2. States with Legal Sports Betting:
   States such as New York and Florida have legalized only sports betting. Although this legalization has allowed for some regulation, it still coexists with illegal gambling, leading to increased losses for consumers.

3. States with Full Legalization:
   States like Michigan and New Jersey have embraced both sports betting and casino games. Interestingly, these areas report the highest per capita gambling losses, highlighting a troubling trend.

The Financial Impact of Gambling on Consumers

The supplement dives deeper into the implications of these varying regulations by analyzing the GGR per capita as a percentage of average income in 2024:

• National Average: The average American’s GGR per capita stands at 0.62% of their income.

• No Legal Gambling States (e.g., California, Texas): Here, the GGR per capita is only 0.31% of average income, reflecting a more manageable gambling landscape.

• Legal Sports Betting States (e.g., New York, Florida): In these regions, that figure rises to 0.77% of average income, indicating that while somewhat regulated, consumers still face significant financial strain.

• Full Legalization States (e.g., Michigan, New Jersey): Here, the GGR per capita soars to 1.12%, translating to considerable losses for individuals.

The Consequences of Increased Legalization

The report indicates a troubling correlation: when states legalize online sports betting or casino games without addressing illegal gambling, per capita losses for consumers grow exponentially. For instance, after legalizing sports betting, states experience a 148% increase in GGR per capita as a percentage of income, while states allowing both sports betting and casino gambling see losses spike by 261%. This clearly underlines the notion that legalization does not automatically equate to consumer protection.

Ohio: A Beacon of Concern

Derek Webb, the founder of CFG, points to Ohio as an alarming case study. Following the legalization of online sports betting in 2023, losses for Ohio residents surged to 1.33% of average income per capita, making it the heaviest burden in the nation—more than double the national average. This startling statistic underscores the ineffectiveness of legalization without stringent controls against illegal gambling.

The Criminal Undercurrent in Online Gambling

Ismail Vali, CEO of Yield Sec, elaborates on how the legal gambling sector is undermined by illicit operators. He notes that illegal gambling platforms offer superior value through enticing bonuses and fewer barriers to entry, as they evade taxes and regulatory expenses. This scenario creates a vicious cycle: without robust enforcement against criminals, the legal market falters, leading to diminished tax revenues and increased consumer losses.

Enforcement as a Priority

The report advocates for a paradigm shift in how states approach gambling laws. Instead of focusing solely on legalization, attention must turn toward law enforcement against illegal operations. Vali stresses that states can maximize revenue only by prioritizing the removal of illegal gambling’s allure, ensuring a fairer playing field for consumers.

About the CFG and Yield Sec

The CFG aims to influence a bipartisan reform in gambling policies grounded in scientific evidence. They welcome open dialogue to push for trustworthy data amidst a cluttered narrative surrounding gambling in America. For deeper insights, the CFG State Supplement #1 examines the dynamics of online gaming across the nation, while Yield Sec monitors illegal activities, providing valuable analytics to stakeholders in the online gambling sector.

This comprehensive overview invites readers to reflect on the complexities of online gambling in America, highlighting the pressing need for regulatory reform and consumer protection amidst rising illegal activities.