New Report Shows Illegal Gambling Still Winning Over Legal Options in the US

Article by : Erik Gibbs Aug 29, 2024

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A recent report from Yield Sec, a market intelligence firm specializing in predictive analytics, has highlighted the persistent dominance of illegal gambling in the US, despite the growth of legal options. The report, which focuses on sports betting and online gambling, shows that illegal operators continue to thrive, significantly surpassing their legal counterparts in gross gaming revenue (GGR).

In the first half of 2024 alone, legal platforms in the US generated $10.8 billion in GGR. However, this pales in comparison to the estimated $29.1 billion lost to illegal gambling during the same period. Yield Sec identified 892 illegal operators active in the US, alongside 651 affiliates promoting these unauthorized platforms.

The report also touched on the expansion of legal gambling markets, noting that two new states, North Carolina and Vermont, entered the live market in 2024. North Carolina, in particular, has shown strong performance, taking in $340 million in wagers and reporting $42 million in revenue within its first five months of operation. Despite these gains, the illegal market remains a formidable competitor, with Yield Sec projecting it could reach $60 billion in GGR by the end of 2024.

This trend of illegal market growth has been consistent over the years. In 2022, the illegal gambling market accounted for $42 billion in GGR, with a slight dip to $40.9 billion in 2023. However, the 2024 numbers suggest a significant resurgence, underscoring the ongoing challenge legal operators face in competing against these illicit platforms.

Yield Sec’s report also points to the substantial impact of illegal gambling on legal operators. According to CEO Ismail Vail, legal operators are under considerable pressure as illegal gambling takes off billions in potential revenue. Vail emphasized the need to redirect this lost revenue back to legal operators, allowing for increased tax contributions and fulfilling the industry’s promises of safe, fair, and responsible gambling.

The report’s findings are consistent with data from the American Gaming Association (AGA), which reported $10.62 billion in GGR for legal sports betting and iGaming in the first half of this year. The AGA’s figures for 2023 and 2022 were $17.21 billion and $12.52 billion, respectively, aligning with Yield Sec’s projections.

2024 has not ended and both the legal and illegal gambling markets are expected to experience significant growth, particularly with the start of the college football season and the upcoming NFL season. The final four months of the year traditionally account for about 35% of US operator handle, suggesting that the numbers could more than double by year-end.