Americans Spend $511 Billion On Illegal Gambling Each Year According To New Report

The 2018 overturn of the Professional and Amateur Sports Protection Act (PASPA) sent major shockwaves through the world of betting. The move allowed for states to launch their own sports betting markets, bringing legal online sportsbooks across the U.S. Most importantly, though, this move presented a major threat to online betting through unregulated or illegal wagering platforms. Some examples of these types of bets are through offshore websites and illicit bookies, rather than fully regulated sportsbooks such as BetMGM Sportsbook, FanDuel Sportsbook, DraftKings Sportsbook, and Caesars Sportsbook.

Well, despite a large portion of the U.S. population now having access to legal mobile sportsbooks as well as retail sportsbooks, billions of dollars are still being spent on illegal gambling activities. Let’s break down the over half trillion spent on illegal gambling in the U.S. each year.

Over Half A Trillion Wagered Illegally By Americans Every Year

A recently released report from the American Gaming Association (AGA) sheds light on the current state of illegal gambling in the U.S., and the numbers aren’t pretty. The report claims that bettors in America wager an astounding $511 billion through illegal outlets each year. These platforms include unregulated and offshore sportsbooks, alleged skill games, and iGaming sites.

While you’d think that sports betting would be a major contributor in this number, though, that’s not the case. The AGA report claims that just $63.8 billion of the $511 billion is illegally wagered by Americans annually on sporting events. This number is still interestingly close to the total estimated legal sports betting handle in the U.S., which comes to approximately $100 billion.

However, iGaming is where you really see the big money flowing in through illegal means. A yearly total of $337.9 billion is spent on different iGaming activities each year, accounting for over 66% of all illegal gambling and resulting in $13.5 billion in revenue. These unlawful online casinos allow users to play table games like blackjack, craps, and roulette, as well as online slot machine games. Meanwhile, U.S. online casinos only see a total revenue of around $5 billion yearly, with mobile casinos like BetRivers Casino and WynnBET Casino only available in six different states.

Major Tax And Revenue Losses From Illegal Gaming

All this money being spent through illegal gambling platforms means that there are significant losses in tax revenue. Illegal online sports betting accounts for $3.8 billion in lost potential revenue to go with the $13.5 billion in iGaming.

Additionally, a great amount of U.S. taxes are missed from these illicit means each year, with a potential $700 million from sports wagering and $3.9 billion from online casinos.

Will These Numbers Lead To More Legalization?

The AGA findings definitely have the potential to fuel more arguments in favor of legalized betting. With Washington D.C. and 36 U.S. states having legal sports gambling, it makes a bit more sense why unlawful sports betting avenues only account for about 12.5% of the entire $511 billion number. However, it could be argued that legalizing sports betting in massive states like Texas and California would significantly cut down that number.

And with the massive amount being spent on illegal iGaming sites each year and billions in missed tax revenue, don’t be surprised if legislators begin arguing in favor of allowing more regulated online casinos in the future.

Anthony Elio is a CU Boulder graduate with a degree in creative writing and advertising. He is the lead Industry Betting Writer at Lineups.com, where he has spent over a year covering industry news in sports betting, casino, and poker.

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