New AGA Analysis Reveals Illegal Gaming Remains Nearly a Third of the U.S. Market

Illegal Operators Cost States $15B In Lost Tax Revenue

WASHINGTON, Aug. 13, 2025 A from the American Gaming Association (AGA) finds that Americans wager a total $673.6 billion annually with illegal and unregulated gambling operators, diverting activity away from licensed operators and denying communities critical resources that fund infrastructure, education, and public safety.

Driven by a sharp rise in illegal iGaming, expanding use of unregulated skill machines, and persistent illegal sports betting, the illegal market has grown 22% since AGA's last report in 2022. Growth in the legal market in recent years has kept the illegal market's share of total U.S. gaming revenue largely steady – with illegal operators capturing smaller shares of sports betting and iGaming revenue – but illegal operators still account for nearly one-third (31.9%) of the total U.S. gaming market.

The illegal and unregulated gambling market generated an estimated $53.9 billion in annual revenue for offshore betting rings and unregulated machine operators, robbing state governments of $15.3 billion in taxes each year.

"Illegal gambling operators are thriving at the expense of American consumers, siphoning billions in tax revenue from state governments, and undercutting the efforts of the legal market," said AGA President and CEO Bill Miller. "It's time for a national crackdown on the pervasive illegal market that is draining state coffers and putting people at risk."

Unregulated "Skill" Machines FindingsUnregulated machines remain one of the fastest-growing threats to legal gaming, with more than 625,000 machines now operating across bars, restaurants, and convenience stores, a 7.7% increase since 2022. These machines generated $30.3 billion in revenue and cost states $9.5 billion in lost tax revenue. With no regulatory oversight, these machines pose serious risks to consumers and communities alike.

IGaming FindingsIllegal online slots and table games reached $18.6 billion in revenue—up nearly 38% since 2022. Most concerning, the share of iGamers who play only on legal sites fell from 52% in 2022 to just 24% today, while the share using both legal and illegal sites soared to 49%, nearly tripling in just three years. Despite this growth, illegal operators hold a smaller share of the total U.S. iGaming market than they did three years ago.

Sports Betting FindingsAmericans wagered an estimated $84 billion with illegal bookies and offshore sportsbooks in the past year, generating $5 billion in revenue and causing $1 billion in tax losses. Compared to 2022, the share of sports bettors exclusively using illegal sites fell by a third and illegal sportsbooks' share of the total U.S. sports betting market fell from 36 percent to 24 percent. One in ten sports bettors still wager exclusively with illegal sources.

"These bad actors operate in the shadows with zero consumer protections, no responsible gaming obligations, and no economic return to the communities they exploit," added Miller. "Combating them requires not only stronger U.S. enforcement, but also continuing to work closely with our international partners to shut down offshore operators and hold them accountable."

Visit AGA's for a state-by-state breakdown of legal gaming in the U.S.

MethodologyThe study was conducted by The Innovation Group on behalf of the American Gaming Association and is based largely on a survey of 2,454 U.S adults, examining their past-year gambling behaviors with both legal and illegal operators as well as their observations of unregulated gaming machines. It also incorporates publicly available data on the size of the legal U.S. gaming market and certain state gaming machine markets.

About the AGA As the national trade group representing the U.S. casino industry, the (AGA) fosters a policy and business environment where legal, regulated gaming thrives. The AGA's diverse membership of commercial and tribal casino operators, sports betting and iGaming companies, gaming suppliers, and more lead the $329 billion industry and support 1.8 million jobs across the country.

SOURCE American Gaming Association