Study: Unregulated Online Gaming Sites Generated $67 Billion in Revenue Last Year

A recent study reveals that unregulated online casino sites and sportsbooks persist in leading internet gambling, even with legal growth in the United States. 

Yield Sec, a gaming consulting firm located in Denver, was recently hired by the Campaign for Fairer Gambling to analyze the legal and illegal online gaming sector in the United States. Yield Sec analysts uncovered surprising data findings. 

The report found that although revenue in the legal online gambling sector increased by 36% last year, with Rhode Island joining six other iGaming states and additional sports betting states launching, the offshore illegal market continued to thrive. Illegal online gaming saw gross gaming revenue (GGR) leap almost double, with a growth rate of 64%. 

Yield Sec estimated that online gamblers in the US lost $90.1 billion last year. Among those losses, the unregulated sector accounted for 74% of the income, which is approximately $67 billion. The research also revealed that about 90% of US consumers have encountered illegal gambling content across the different media they engage with. 

Even in jurisdictions where iGaming and online sports betting are allowed, Yield Sec discovered that the unregulated online market remained robust. 

Researchers stated that the unregulated online casino and sportsbook market draws players away from the legal market by offering superior promotions and odds without the burden of regulations and taxes. Although this may be accurate, individuals using unregulated gaming sites lack consumer protections, which include assurances that their winning bets will be honored and that withdrawals from their accounts will be processed. 

Invitation to Act 

The Campaign for Fairer Gambling, spearheaded and financed by poker expert and table game innovator Derek Webb, aims to promote evidence-driven gambling reform to safeguard online borders, support the economy, and reduce gambling-related harm. Webb mentions that the Yield Sec report points out how the legalization of online sports betting and casinos in some states has been ill-conceived.

"US legalization of internet gambling without a game plan to tackle the illegal sector has been an unmitigated disaster,” Webb declared. “Any pundit, commentator, legislator, regulator, lawyer, or lobbyist selling legalization alone as a cure for illegal online gambling should be ashamed.”

Advocates for the legalization of sports wagering and online gambling, such as the American Gaming Association (AGA), have consistently argued that regulation negatively impacts illegal enterprises. Yield Sec reports that this has not been true, but the company’s founder and CEO, Ismail Vali, claims that the fault can be shared. 

“Let’s not pin this on gambling regulators alone. Their job is to supervise the licensed industry, not to chase criminals who never applied for a license. Illegal gambling is everyone’s problem — operators, law enforcement, media companies, social platforms, and governments all have a role to play,” Vali said. 

Sweeps, Forecast Markets 

It's important to mention that the Yield Sec review viewed illegal gambling as including disputed online sweepstakes sites that opponents claim are pretending to be free-to-play platforms but are actually illegal gambling operations. Online prediction markets such as Kalshi that provide sports contracts were similarly classified as banned gaming platforms. 

“Illegals feature all products in all states, including casino and popular predictor marketplaces which illegals have hijacked to feature events such as election and tariffs betting alongside sports and financials,” the Yield Sec presser read.