Americans Gamble For $511 Billion Per Year — Illegally

The American Gaming Association (AGA) has announced that Americans illegally gamble $511 billion per year. As a consequence, illegal gambling in the United States each year costs the government $13.3 billion in tax revenue, which is more than the tax generated by legal operators ($11.7 billion).

Last week, the American Gaming Association (AGA) released its research on the illegal and unregulated gambling markets in the US including different interesting results. The estimated turnover of the illegal gambling market is estimated to be $44.2 billion per year. In the United States, online gambling is allowed on a state level with different rules and laws for each state.

Since it was announced in 2018 that each state could follow its own gambling rules and laws, more than 30 states have legalised online gambling with most states only allowing online sports betting. Some states allow both sports betting and online casino games.

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Illegal Operators Don’t Adhere To US Rules

In its report, the AGA indicates that the legal gambling industry is one of the most regulated industries in the US. Licenced operators must therefore comply with many conditions and rules in order to protect consumers and to guarantee confidence in the gambling market. Illegal and unregulated operators do adhere to these rules as they are not regulated by an authority in the borders of the US.

As a result, players are believed to be less well protected in terms of financial losses and potential gambling addictions whilst online operators do not have to pay taxes, unlike the legal operators that hold a licence. The believed lost tax revenue on a federal level of $13.3 billion in 2021 is higher than the amount of taxes that legal operators paid: $11.7 billion.

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Illegal betting in the US Estimated bets Estimated turnover Estimated unpaid taxes
Sports betting $ 63,8 billion $ 3,8 billion $ 700 million
Online pokies and table games $ 337,9 billion $ 13,5 billion $ 3,9 billion
Illegal online pokies $ 109,2 billion $ 26,9 billion $ 8,7 billion
Total $ 510,9 billion $ 44,2 billion $ 13,3 billion

Data from the American Gaming Association (AGA)

US Government Missing Out on $700 Million per Year

In the report of the American Gaming Association, it is estimated that Americans bet $ 63.8 billion on sports events per year leading to the government missing out on about $700 million in taxes. The illegal sports betting market accounts for nearly 40% of the total betting market, with Americans expected to wager only $100 million this year with legal operators. Table games and online pokies are grouped together and seen as the most popular category of casino games with an estimated annual turnover of $ 13,5 billion out of which the government misses out on $ 3,9 billion in taxes. With an estimated revenue of $13.5 billion, the illegal online gambling market is almost three times the size of the legal online gambling market, which is expected to reach $5 billion in revenue by 2022.

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Only Half of Players Wager at Legal Casinos

The research also looked at the division between legal and illegal websites: 51% of players indicate that they only play at legal online casino sites, 34% play at both legal and illegal sites, and 15% only play on illegal gambling sites.

Illegal and unregulated gambling plagues our society, taking advantage of vulnerable consumers, circumventing legal obligations and robbing communities of vital tax revenue for infrastructure, education and more. We have always known that the illegal and unregulated market is huge, but this report shows how widespread it is in our country.

Bill Miller, CEO American Gaming Association (AGA)

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A seasoned veteran with years of igaming experience. A local to New Zealand land based casinos, Frank will teach you the ins and outs of all things online casino, diving deep into the subjects of casino bonus, freepins, online pokies and $1 NZ deposit bonus.