US Illegal Gambling Market Estimated at $97 Billion in 2025

A new study estimates that Americans generated $97.4 billion in gross gaming revenue through unlicensed online gambling operators in 2025, putting the offshore market at a scale that would rival the regulated industry.

The research, conducted by Gaming Compliance International (GCI) and commissioned by the Campaign for Fairer Gambling, estimates that the total US online gambling market reached $125.6 billion last year. Based on its methodology, approximately 77% of that activity came through unlicensed operators, compared with 23% through regulated platforms.

The estimate represents a significant increase from GCI's previous assessment. The firm put illegal online gambling revenue at $67.1 billion in 2024, meaning its latest estimate represents an increase of roughly 45% in one year.

The findings come as regulated sports betting continues to expand across the US, while online casino remains legal in only a limited number of states.

A growing market outside the regulated system

The expansion of legal sports betting has not eliminated demand for offshore gambling.

Sports betting is now available through licensed operators in much of the country, but access to online casino remains considerably more limited. Consumers in states without regulated iGaming can therefore still turn to offshore operators for casino products, while many offshore sites also offer sportsbooks alongside them.

Those operators are not bound by the same state-by-state licensing structure as regulated companies. They can accept customers across jurisdictions where legal online gambling products may not be available and operate without the same licensing, taxation and compliance requirements faced by US-licensed businesses.

That has allowed an offshore market to develop alongside the regulated industry rather than simply disappearing as more states legalize gambling.

The $97 billion estimate is disputed

The scale of the market remains difficult to measure, and GCI's estimate is substantially higher than other industry estimates.

The American Gaming Association estimated in 2025 that the entire US illegal gambling market generated approximately $53.9 billion annually. That figure included both illegal online gambling and unregulated gaming machines.

The AGA estimated illegal online gambling itself at approximately $23.6 billion, including $18.6 billion from online casino and $5 billion from illegal sports betting.

The difference between the estimates largely comes down to methodology.

GCI's research uses analysis of online gambling activity, including websites, traffic and referrals, while the AGA's research has relied more heavily on consumer surveys and analysis of unregulated gaming activity.

As a result, the two estimates are not directly measuring the market in exactly the same way.

That makes the $97.4 billion figure notable, but it should be treated as an estimate rather than an established measurement of the market.

Legalization has not closed every gap

GCI's state-level analysis also highlights the differences created by the US's fragmented gambling regulations.

States that have legalized both online sports betting and online casino recorded higher levels of overall online gambling activity relative to income than states where only sports betting is legal or where online gambling remains prohibited.

At the same time, the research found significant levels of illegal online gambling in states that already have regulated sports betting.

Louisiana, Kentucky, Ohio, Kansas, Indiana, Iowa, Tennessee, Nevada and Illinois were among the states identified by GCI as having high levels of illegal online gambling losses relative to income.

The underlying issue is straightforward: legalizing one form of gambling does not necessarily provide consumers with a legal alternative for another.

A consumer may have access to a regulated sportsbook while having no legal online casino available in their state. Offshore operators can provide both.

Offshore operators continue to compete on access

The regulatory differences also give offshore operators a different operating model from their licensed counterparts.

US-licensed gambling companies must comply with state licensing requirements, responsible gambling regulations, geolocation controls, advertising rules and taxation. Offshore operators operating outside that framework do not face those same requirements.

They can also offer products across state lines and use a range of online acquisition channels, including affiliates, social media and search.

The result is a market that remains accessible despite the continued expansion of legal gambling.

The issue is particularly relevant to the growth of crypto-based gambling, where operators can attract US customers without operating within the traditional state-regulated gaming system.

Prediction markets add another layer

The boundaries of the US online gambling market are also becoming less clear as prediction markets expand.

Platforms such as Kalshi classify event contracts as financial products rather than gambling. State regulators and governments have challenged that distinction in a number of cases, creating an ongoing debate over whether prediction markets should fall under financial regulation or state gambling laws.

That distinction also affects attempts to measure the size of the broader market.

GCI includes prediction markets within its wider sports betting calculations, further demonstrating how the definition of online gambling can materially change the figures being reported.

What the estimate means for the US market

The exact size of America's illegal online gambling market remains open to debate.

GCI's $97.4 billion estimate is considerably higher than the American Gaming Association's figures, and the differences between the two highlight the difficulty of measuring activity taking place outside the regulated system.

But regardless of which estimate is closest to reality, the underlying market is substantial.

The US has spent years expanding regulated sports betting while leaving online casino unavailable in most states. That has created a system where legal operators and offshore platforms continue to compete for many of the same customers under very different regulatory conditions.

The question for regulators is no longer simply whether Americans are gambling with offshore operators. It is how much of that activity exists, why consumers continue to use those platforms, and whether further expansion of the regulated market can meaningfully reduce it.

GCI's latest estimate suggests the answer could be measured in tens of billions of dollars.