US Illegal Gambling Market Hits $97.4bn in 2025 Despite Regulation

The assumption that legalizing online gambling would automatically eliminate the black market is facing a harsh reality check in the United States. Despite the expansion of regulated gambling across numerous states, the illegal sector is not only persisting but is actually growing faster than its licensed counterpart. This is the sobering conclusion of a new study that examines the scale of unregulated gambling in the world's largest economy in detail.

Players are increasingly migrating to providers that pay no taxes, impose no strict limits, and often lure customers with more aggressive bonus offers. While authorities attempt to create safety through licensing, unlicensed platforms seem to enjoy a massive competitive advantage due to their flexibility and lack of bureaucratic hurdles. This leads to a dangerous imbalance where legal operators bear the burden of regulation while profits disappear into dark channels.

Numbers and facts

The study commissioned by the Campaign for Fairer Gambling (CFG) provides alarming key figures. In 2025, the revenue of unregulated online gambling providers in the US totaled $97.4 billion. This value refers to Gross Gaming Revenue (GGR). Particularly explosive is the market share: unlicensed sites and apps now account for 77% of the total US online gambling market. This is a significant increase compared to 2024, when this share was claimed to be 74%.

Data from Gaming Compliance International (GCI) clarifies that the illegal market is growing faster than the regulated sector. This contradicts the common thesis that more legal options automatically pull players out of illegality. The study argues that the current strategy of legalizing online sports betting and casino games has in no way curbed the growth of the black market. Instead, a coexistence has emerged in which the unregulated sector has even been able to expand its dominance.

Background

The conflict between regulation and the black market is not a new phenomenon, but the dimensions in the US are now reaching a critical mass. The Campaign for Fairer Gambling uses these figures to point out deficiencies in the current system. When three-quarters of the money ends up with providers that are not subject to state supervision, measures for gambling addiction prevention or youth protection simply do not apply.

"The study claimed that unlicensed sites and apps now account for 77% of the total US online gambling market by GGR, up from a claimed 74% in 2024." - Gaming Compliance International, Study Report for CFG

A major reason for the flight into the black market is often over-regulation in the legal sector or simply a lack of availability in certain states. While some states like New Jersey or Pennsylvania allow online casinos, it remains strictly prohibited in other regions. There, illegal offshore providers fill the gap, often operating from the Caribbean or the Philippines. These providers are not subject to US laws and evade any access by the local judiciary.

Why it matters for German players

For players in Germany, the view of the US offers an important lesson about the importance of channelization. In Germany, the State Treaty on Gambling 2021 (GlüStV 2021) is the legal basis. It was created to provide players with a safe, licensed environment. Anyone playing in a casino licensed by the Joint Gambling Authority of the States (GGL) enjoys the full protection of German law. However, this also means adhering to strict rules: the deposit limit of 1,000 euros per month and the stake limit of 1 euro per spin on virtual slots are central here.

These measures, monitored via the central LUGAS system, serve player protection. However, anyone attempting to bypass these limits on unlicensed MGA or Curacao sites enters a legal gray area and loses all protection regarding payout disputes. Germany faces a similar struggle as the US: the GGL whitelist can only successfully stand against the black market if the legal offering remains attractive enough. German players should therefore always check if their provider is on the official whitelist to avoid becoming part of a statistic like the one currently seen in the US.

What it means for GGL-licensed casinos

German GGL-licensed providers face the challenge of remaining competitive despite strict requirements. If the gap between legal gaming enjoyment and the freedoms of the black market becomes too wide, there is a risk of migration similar to that in the US. The US figures of $97.4 billion in the unregulated market serve as a warning sign for any regulatory authority worldwide.

It is not enough to simply issue bans. Channelization only works if legal providers deliver a product that is both safe and entertaining. The GGL must therefore walk a fine line: enforcing player protection without compromise, while simultaneously not making the legal market unattractive for the average player through draconian restrictions. The development in the US proves that legalization without consistent action against illegal competition and without attractive frameworks for licensees does not lead to success.