Article By Stephen Crystal – Founder & CEO, SCCG – SCHEDULE A MEETING!
As someone who’s spent decades navigating both the legal corridors and gray areas of the gambling world, I find the latest Yield Sec report—commissioned by the Campaign for Fairer Gambling—deeply illuminating but not surprising. It confirms what many of us working in the trenches already know: illegal online gambling in the U.S. is not just surviving—it’s thriving. In fact, it’s eclipsing the legal market in size, speed, and consumer reach.
The Numbers Don’t Lie
The report found that in 2024, unregulated offshore operators generated 74% of the U.S.’s $90.1 billion online gross gambling revenue. That’s over $67 billion flowing through platforms that operate outside the scope of any U.S. regulatory body. Legal, licensed operators brought in just $23 billion. Despite a year-over-year growth of 26% for legal gambling, illegal gambling surged 64%—a pace that regulators and policymakers simply haven’t matched with effective oversight.
Why the Illegal Market Wins
There are structural reasons why illegal platforms have captured such a massive share of GGR. Offshore operators don’t pay state taxes or comply with U.S. regulations. That allows them to offer:
- Higher bonuses
- Fewer restrictions
- Broader product selections
- Faster onboarding processes
And perhaps most importantly—they aren’t burdened by the patchwork of state-by-state licensing and inconsistent marketing limitations that tie legal operators’ hands. It’s no wonder that licensed platforms only accounted for 12% of total audience exposure in 2024.
The Role of Affiliates
Another underreported insight from the Yield Sec analysis is the role affiliates play. Over 668 affiliates actively promoted illegal gambling sites, compared to a fraction of that promoting regulated options. This misalignment speaks to a visibility crisis in the legal sector—one where brand awareness and consumer education simply haven’t kept pace with market growth.
Geography Is Destiny
States with fully regulated online gambling like New Jersey, Pennsylvania, and Michigan have done a better job balancing the playing field. Legal operators captured roughly 57%–58% of GGR in these regions. But in states like Ohio, Texas, and California—where online gambling is illegal or barely regulated—offshore sites dominate entirely.
The most telling example: Ohio’s per capita losses to illegal online gambling stood at $316 for online casinos and $130 for sports betting, totaling more than 1.33% of average income per person—more than double the national average. This isn’t just about legality anymore; it’s about economics, consumer protection, and responsible gaming.
Regulation Without Enforcement Is Hollow
What this report makes painfully clear is that legalization alone doesn’t displace illegal activity. In fact, as legal frameworks expand, total player losses increase—often without denting the illegal share. States with legal online sports betting and casinos see an average GGR per capita of 1.12% of income, compared to 0.31% in non-legalized states.
This calls for a coordinated enforcement strategy. Simply allowing legal operators to set up shop isn’t enough. Without tangible enforcement actions against offshore operators—and without meaningful consumer education—states will continue to lose tax revenue and consumers will remain exposed to unregulated markets.
What Comes Next?
If we want to reverse the tide of illegal online gambling in the U.S., we need a national approach that blends legislation, technology, and education:
- Stronger penalties and enforcement for unlicensed operators and their affiliates
- Collaborative tools for states to track, block, and act against illegal platforms
- Public-facing awareness campaigns to educate users on the difference between legal and illegal operators
- Incentivized compliance measures for affiliates and marketing platforms
We’ve made massive strides since the repeal of PASPA in 2018, but this report reminds us how far we still have to go. The goal isn’t just to grow the legal market—it’s to protect it. Because if illegal operators continue to outpace regulated ones in scale and appeal, the future of lawful, responsible online gambling in America remains in jeopardy.
