US Illegal Gambling Market Reaches $97.4bn
A new analysis estimates that unlicensed online gambling generated $97.4 billion in gross gaming revenue from US consumers in 2025, representing 77% of the country’s total online gambling market.
Gaming Compliance International (GCI) prepared the research for the Campaign for Fairer Gambling (CFG). According to the report, the overall US online gambling market reached $125.6 billion in 2025, increasing from $90.1 billion in 2024.
The study found that revenue from the unregulated segment increased by 45.2% year-on-year, rising from $67.1 billion to $97.4 billion. During the same period, regulated online gambling revenue grew from $23 billion to $28.3 billion.
Derek Webb, who funds the CFG and previously supported restrictions on high-stakes betting terminals in Britain, called for stronger action against operators that operate outside regulated markets.
“The legal sector uses the presence of the illicit sector to demand legalisation, then asks for low tax and regulation to compete against the illicit sector.
“Taking action against bad actors in the illicit sector is the solution and must be the priority for all stakeholders.”
Report Examines Gambling Losses Across US States
GCI’s research also assessed gambling activity at the state level by using a loss ratio calculation. The measurement compares gambling revenue with population and income data to show the relationship between losses and economic conditions.
States that allow both online sports betting and online casino gaming recorded an average loss ratio of 1.38% in 2025. States without either form of legal online gambling recorded a lower average ratio of 0.44%.
Louisiana reported the highest overall ratio in the study, reaching 1.44% of gambling losses compared with income. The report attributed California’s 0.43% ratio entirely to unregulated gambling activity because the state does not permit legal online gambling.
West Virginia recorded a total loss ratio of 1.57%, with illegal operators accounting for 0.87 percentage points of that figure.
The CFG said the findings indicate that authorities should focus on addressing unlicensed gambling activity before further expanding regulated online gambling markets. The organization also confirmed that it commissioned and funded the research.
Research Methods Lead To Different Market Estimates
GCI’s estimate differs considerably from figures published in a 2025 study commissioned by the American Gaming Association (AGA). That research valued the entire US illegal gambling market at $53.9 billion, including $18.6 billion from illegal iGaming and $5 billion from illegal sports betting.
The difference between the two estimates comes from the methods used to calculate market size. GCI tracks online gambling websites and applies a value-per-visit approach to estimate activity. The AGA study relied on consumer surveys alongside information about unregulated gaming machines.
Previous GCI estimates have also attracted debate. The company’s earlier calculation of $81.4 billion in global crypto-gambling revenue was questioned by blockchain analytics firm Tanzanite, which estimated the market value at closer to $10 billion.
Webb defended GCI’s approach, stating that he had examined detailed analysis from the company and found no reason to question its conclusions.
The discussion around illegal gambling calculations also includes prediction markets. GCI counts prediction market activity within its sports betting figures, while US regulators and lawmakers continue to debate whether prediction contracts should fall under gambling rules or financial market oversight.
Webb said addressing illegal gambling requires enforcement measures alongside licensing policies.
“The black market in the US is so well established it doesn’t matter how much you legalize,” he said. “There has to be some enforcement methodology to deal with it.”
Source:
US Illegal Gambling Market Reaches $97.4bn, realmoneyaction.com, August 12, 2026