Illegal Gambling
Exploiting communities. Draining public resources. Manipulating vulnerable consumers.
America’s Illegal Gambling Market is Large, Dangerous and Growing
This massive underground economy generates $53.9 billion in revenue annually from offshore betting rings and unregulated machine operators while robbing state governments of $15.3 billion in taxes that should be funding schools, fixing roads, and supporting public services. Instead, it flows to hidden operators who offer no consumer safeguards and no accountability.
The illegal gambling market continues to grow. Since 2022, it has expanded by 22%, fueled by a surge in illegal online casinos, proliferating unregulated slot machines, and persistent offshore sports book operators
Americans wager $673.6 billion annually with illegal and unregulated gambling operators—nearly one-third of the entire U.S. gaming market.
What Does Illegal Gambling Look Like?
Illegal gambling takes many forms, from offshore websites to unlicensed machines in gas stations.
Illegal Sports Betting + Prediction Markets
Illegal sports betting occurs through offshore websites and illegal bookmakers. Despite legal sports betting in 40 jurisdictions, Americans still wager an estimated $84 billion annually through illegal channels.
Prediction markets offering sports event contracts clearly mimic sports betting. Labeled as “futures” or “swaps”, these products are being offered illegally in states that have chosen not to offer commercial sports betting, including where tribes have the exclusive rights to sports wagering – by exploiting loopholes in federal commodities laws. These contracts are operating without the required consumer protections, responsible gaming safeguards, or state oversight that sportsbooks must adhere to. As a result, consumers are put at risk and more than $200 million in tax revenue has been diverted away from local communities.
Illegal iGaming
Illegal iGaming includes includes online slots and table games offered by offshore casino websites. This illegal segment generates $18.6 billion in revenue annually and is growing rapidly—up 38% since 2022. Offshore online casinos accept bets from U.S. customers but do not comply with U.S. consumer protection laws or pay taxes to states.
Unregulated Gaming Machines
Unregulated gaming machines are physical slot-style machines operating in bars, gas stations, convenience stores, and other non-casino locations without a casino license. More than 625,000 unregulated machines now operate nationwide, meaning 40% of all gaming machines in America are unlicensed. Often marketed as “skill game” machines, these unregulated devices generate $30.3 billion in revenue annually while players lose money at nearly three times the rate of regulated machines.
Illegal Sports Betting + Prediction Markets
Illegal sports betting occurs through offshore websites and illegal bookmakers. Despite legal sports betting in 40 jurisdictions, Americans still wager an estimated $84 billion annually through illegal channels.
Prediction markets offering sports event contracts clearly mimic sports betting. Labeled as “futures” or “swaps”, these products are being offered illegally in states that have chosen not to offer commercial sports betting, including where tribes have the exclusive rights to sports wagering – by exploiting loopholes in federal commodities laws. These contracts are operating without the required consumer protections, responsible gaming safeguards, or state oversight that sportsbooks must adhere to. As a result, consumers are put at risk and more than $200 million in tax revenue has been diverted away from local communities.
Illegal iGaming
Illegal iGaming includes includes online slots and table games offered by offshore casino websites. This illegal segment generates $18.6 billion in revenue annually and is growing rapidly—up 38% since 2022. Offshore online casinos accept bets from U.S. customers but do not comply with U.S. consumer protection laws or pay taxes to states.
Unregulated Gaming Machines
Unregulated gaming machines are physical slot-style machines operating in bars, gas stations, convenience stores, and other non-casino locations without a casino license. More than 625,000 unregulated machines now operate nationwide, meaning 40% of all gaming machines in America are unlicensed. Often marketed as “skill game” machines, these unregulated devices generate $30.3 billion in revenue annually while players lose money at nearly three times the rate of regulated machines.
Law Violations
Illegal gambling operates outside state and federal law, evading regulation, taxation, and oversight. What laws do illegal gambling operators violate?
- Wire Act – Prohibits interstate transmission of bets or wagers
- Illegal Gambling Business Act – Makes it a federal crime to operate illegal gambling businesses
- Johnson Act – Makes it illegal to manufacture, possess, or transport unregulated gambling devices and machines
- In addition to these federal laws, state laws further prohibit unauthorized gambling activities.
Legal, Regulated Gambling Across the U.S.
This interactive resource provides a state-by-state impact of the casino gaming industry in the US. Covering casino gaming, sports betting and iGaming, it offers the latest data to navigate the evolving gaming landscape.
Why Illegal Gambling Matters
Illegal gambling poses serious threats to consumers, communities, and tribal sovereignty. These operations offer zero safeguards while draining billions from public funds.
Consumer protection is nonexistent.
Economic damage to communities is severe.
Vulnerable populations are deliberately targeted.
Offshore gambling operators go to great lengths to hide their identities and locations…
AGA is Partnering with State and Federal Authorities to Take Action
The AGA has successfully elevated illegal gambling to a bipartisan federal priority.
FBI Alert on Illegal Gambling
The AGA worked closely with the FBI to update its public service announcement on the risks of illegal gambling. The announcement includes tips to protect yourself and how to bet legally and responsibly.
AGA Research and Advocacy is Fueling a Wave of State Action
Fighting “sweepstakes” casinos.
Cracking down on unregulated gambling machines.
No Matter the Name, It's Still Sports Betting
When prediction market platforms offer sports event contracts without state oversight, they skip the rules that states have set forth to protect players and support local communities. That means less funding for schools, public safety, and infrastructure.
The Fight Against Illegal Gambling is Grabbing Headlines
Recent news coverage demonstrates growing awareness and enforcement momentum across the country.
Opinion Leaders Speak Out
Influential voices across the political spectrum are calling attention to the dangers of illegal gambling.