ONLINE WORLD NEWS America counting cost of illegal betting 2 months ago Iwo Bulski Post Views: 117 A new report commissioned by the American Gaming Association has estimated the US illegal gambling market to be worth $44.2bn per year, with players betting more than half a trillion dollars on unregulated sites and machines. The report was produced by the Innovation Group and examined three sectors of illegal or “grey market” gambling: sports betting, online casino and “skill gaming” machines. The Innovation Group conducted a survey of 5,284 US adults, asking questions about “their overall gambling habits for both land-based and interactive and regulated and unregulated gambling”. Players’ spend with regulated sites was then benchmarked against official figures in order to understand how players may under- or over-report their spend, and this was then used to adjust figures for unregulated spend. This was combined with baseline figures based on public reporting, census data and other sources in order to determine the size of the unlicensed market. Illegal gambling: “a scourge on society” In total, the report found that players gambled $510.9bn per year using unregulated sites or machines, leading to revenue of $44.2bn. “Illegal and unregulated gambling is a scourge on our society, taking advantage of vulnerable consumers, skirting regulatory obligations and robbing communities of critical tax revenue for infrastructure, education and more. We have always known that the illegal and unregulated market is expansive, but this report illuminates just how pervasive it is.” – AGA president and CEO Bill Miller said. Unlicensed online casino In terms of the amount bet, the largest illegal gambling sector was online slots and table games. Players are estimated to stake $337.9bn annually on unlicensed online slot and table games, with the vertical being permitted in only a handful of US states. These games then produce $13.5bn in revenue for unlicensed operators. In total, 52% of online casino players only used legal online casino sites. Meanwhile, 30% of players only used illegal channels, while 18% of players used both legal and illegal sites. Breaking illegal online casino revenue down by region, players in the south – in which there are no states where online casino is legal – staked the most on online casino, at $150.8bn. This led to $6.0bn in revenue. For the midwest, the revenue total was $3.7bn on stakes of $91.8bn. In the west, revenue was $2.0bn on stakes of $49.2bn. In the northeast – in which legal online casino is more common – illegal revenue was lowest at $1.9bn, on stakes of $46.1bn. Skill machines While online casino stakes were higher, unlicensed machines produced more revenue, bringing in $26.9bn on stakes of $109.2bn. The report used five “benchmark states” where grey-market, “skill-based” machines are common in order to determine the total figure. These states were Nebraska, Georgia, Virginia, Kentucky and Pennsylvania. Again, the South had the most revenue with $12.0bn, on stakes of $49.0bn. In the northeast, revenue was $5.6bn, on stakes of $22.9bn. The midwest and south both had revenue of $4.6bn on stakes of $18.7bn. In 2021, the AGA warned that there was a “rapid growth” in the popularity of these skill gaming machines. Unlicensed sports betting In sports betting, illegal revneue was lowest, at $3.8bn, while handle was $63.8bn. Despite betting being legal in 31 states, only 51% of US sports bettors said they did so only via legal channels. This compared to 15% of bettors who only used illegal operators, while 34% used both legal and illegal options. In 2020, the AGA found that more than half of Americans that bet on sports with illegal operators believe they are wagering legally. Revenue and handle were again highest in the South – with less legal sports betting states – at $1.8bn and $29.5bn, respectively. In the midwest, handle was $17.0bn and revenue was $1.0bn. In the west, handle was $7.0bn and revenue $417m, while in the northeast, revenue was $621m from handle of $10.4m. Illegal gambling effects The AGA noted that, while licensed operators have to comply with tight regulatory standards, the same is not true for the unlicensed sector. As a result, the body said, unlicensed operators risk exposing players to much more harm. “The legal gaming industry is among the most highly regulated industries in America. Whether it is financial solvency and other licensing requirements, know your customer or anti-money laundering regulations, legal gaming operators and suppliers comply with thousands of laws and regulations designed to ensure consumer protections and confidence in the gaming market. Illegal and unregulated gambling operators do not follow any of these standards, which exposes consumers to severe risk and undermines the economic and tax contributions of the legal gaming industry.” – Bill Miller said. In addition, it said that unlicensed gambling also represents a major loss to tax revenues. “The scale of the tax loss is enormous: more than half of all potential state gaming tax dollars are lost to unregulated operators” Based by: igbnorthamerica.com, igamingbusiness.com About Post Author Iwo Bulski Issues related to the gambling business is engaged in more than 30 years. My empirical experience gives me the opportunity to present events and companies from this business with full knowledge and industry knowledge. See author's posts Iwo BulskiIssues related to the gambling business is engaged in more than 30 years. My empirical experience gives me the opportunity to present events and companies from this business with full knowledge and industry knowledge. 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