$9.5B in Illegal Gambling Coming From N.Y., N.J., Minn: Report
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U.S. regulated gaming fails to make ‘much of a dent’ in illegal gambling revenue, report finds.
Legal, regulated sports betting and iGaming haven’t made “much of a dent” in illegal wagering revenue, the founder of Campaign for Fairer Gambling says.
to report on New York, New Jersey, and Minnesota, the online marketplace intelligence platform found that those three U.S. states produced $9.5 billion in illegal gross gaming revenue. Nearly a quarter of the $40.92 billion generated nationwide by hundreds of illegal online wagering companies came from those three markets alone.
"The dominance of illegal online gambling operators remains unchallenged despite the expansion of legal gambling," CFG founder Derek Webb said. "Sector-friendly legislation, regulation, and tax rates have not made much of a dent. Despite wildly different legal regimes, these three states continue to accommodate over 800 illegal operators who operate with zero regard for state law."
Staggering numbers
New York and New Jersey both have legal, regulated sports betting while the Garden State also has iGaming.
Yield Sec’s report found that $3.4 billion, or 49%, of the Empire State’s total online marketplace goes to illegal online casino gaming while illegal online sports betting made up $1.9 billion, or 27%.
In the Garden State, iGaming accounts for $996 million (22%) while sports betting makes up $719 million (16%) of the online gaming market.
Minnesota sports betting has still not been legalized, although it came during the 2024 legislative session which ended in late May. North Star State betting proponents have argued that regulating it will help curb the black market.
Roughly $929 million of the total online marketplace, or 38%, comes from illegal wagering, according to Yield Sec. Illegal online casinos account for $1.5 billion (62%) of the unregulated market.
"This data and analysis exposes a stark reality: illegal gambling operators are brazenly stealing money from state and federal coffers, and legitimate American industry," Yield Sec CEO and founder Ismail Vali said.
Offering a solution
When PASPA, a law that restricted all but a few markets from having legal sports betting, was repealed in 2018, the decision to legalize was left to U.S. states with no federal government legislation passed.
Webb and Vali say this study shows that needs to change.
“It's time for the federal government to end this theft in broad daylight,” Vali said.
Webb argues that the staggering revenue numbers from illegal operators demand federal oversight of online gaming.
“We are eager to equip policymakers with real, reliable data, so that we can have more informed, balanced debate, and ultimately smarter gambling policy," Webb added.
