Illegal Gambling in the US Continues to Rise

It’s been another successful year for the American gambling industry. A Yield Sec report has shown that gross gaming revenue (GGR) for the first six months of this year was $39.9 billion, according to agamble.com. However, of this amount, $29.1 billion came from unlicensed and unregulated illegal betting platforms.

The Yield Sec report stated that the GGR for legal betting sites was $10.8 billion between January and the end of June 2024. They use predictive analytics when compiling their statistics. Their report highlights the problem of illegal gambling sites that exist in the US.

In 2018 a US Supreme Court Judge ruling changed the American gambling industry. He ruled in favor of campaigners who wanted individual states to be able to make the final decision on whether or not to make sports betting legal.

This has led to over 30 US states going down the legalization route but despite this, many gamblers still prefer to use unlicensed sites to place their wagers.

The report states that the number of illegal operators in the US for the first six months of 2024 was 892. There were also 651 affiliates who have been promoting these illegal platforms.

Last year saw Yield Sec make a prediction that GGR for the US gambling industry would be $40.9 billion in 2024. The figures they have released for the first six months indicate that will easily be surpassed.

This year has already seen Vermont and North Carolina join those who have made gambling legal in their states. North Carolina  has long been a popular state for gambling at casinos but now online sports betting is legal.

In terms of population, North Carolina is the ninth biggest state in the US. It is sixth in terms of population on the legal betting state list. The first five months of business have seen $340 million taken in bets. This has produced reported revenue of $42 million.

The Super Bowl is a betting bonanza every year. Even those who don’t regularly bet on sport want to have a flutter on what is one of the largest sporting events in the world. However, Yield Sec reported that two-thirds of bets placed in the US this year on the Super Bowl were made on illegal platforms.

Speaking about their findings, Ismail Vail (the CEO of Yield Sec) said that “legal operators are under serious pressure.”  The CEO added that the focus should be on that $29.1 billion figure. It’s a huge amount that has been lost to the illegal side of the US gambling industry.

That’s not just an amount that is hitting the revenues of legal US gambling companies. One of the key reasons US states are in favor of making gambling legal is the tax that they can receive from the industry. They are missing out therefore on the tax that could be received from that $29.1 billion.

It also puts gamblers in danger because of the lack of customer protection that exists in the illegal betting market. This puts gamblers at risk of unfair practices with there being no regulation of the unlicensed sites.

If a gambler is unhappy about the licensed site they are a member of, then they can make a complaint to the regulatory body in their state. They will then investigate the complaint and take action if they feel it is necessary. That simply isn’t the case with the unlicensed gambling sites in the US.

The problems caused by the illegal betting market are nothing new unfortunately. Back in 2022, Yield Sec reported that the GGR for the illegal market totalled $42 billion. There  was a slight fall to $40.9 billion last year but the problem seems to be growing this year. The total for the first half of this year is already over half of that recorded for 2023. 

It’s estimated that the final figure for this year could be $60 billion. That’s possible as the second half of this year will see the return of the NFL, College football and NBA and that will provide plenty of potential betting revenue. The final four months of the year usually accounts for 35% of the yearly US operator handle.

The legal betting market is progressing well. The forecast by Yield Sec is that the total GGR for this year will be at least $20 billion. That would be over $3 billion more than last year and considerably higher than the 2022 figure of $12.3 billion. They are impressive figures but the industry knows they could be even higher if action was taken against the illegal betting market.