The Dark Underbelly: A Look at Illegal Gambling

Illegal gambling and unregulated betting in the US are estimated to have created a market worth over $500bn a year. However, none of that is going to the IRS, and state tax losses mean public bodies and good causes miss out. Let’s examine whether new gambling laws in the US are the answer to banishing illegal gambling for good. 

llegal Online Gambling in the USA

According to a 2022 report by the American Gaming Association, the unregulated gambling market in the US accounted for $510bn. Of that, $44bn was revenue across online slots, table games, and sports betting. 

Now compare that to commercial gambling revenue. Gross gaming revenue (GGR) for commercial gaming – including casino games, online betting, and sports betting – totalled $66.5bn for 2023.

The Growth of Online Betting

Traditional gaming has led to a boom in gambling over the past few years. It’s not only brick-and-mortar casinos that are reporting record profits, either. New online casinos and sportsbooks are reporting year-on-year growth. 

The reasons for the growth in betting are obvious. Before 2013, no US states had legalized online casinos or poker. The events of Black Friday led to unregulated poker sites being shut down, though some offshore rooms continued to accept players. 

However, after 2013, individual states were given the green light to issue licenses to online casinos. As of July 2024, half a dozen US states offer regulated online casino games. 

In addition, the Supreme Court’s reversal of PASPA in 2018 meant states were able to allow regulated sports betting for the first time. Over 35 states now have some sort of regulated sports betting industry, either for mobile, online, or land-based gambling. 

The Normalization of Gambling in the US

The relaxation of sports betting and online casino laws in the US has led to a normalization of gambling. Where gamblers were once required to visit Las Vegas or Atlantic City to place bets, it has become easy to switch on a laptop or smartphone and gamble wherever you are. 

In 2020, an AGA report found that nearly half of American gamblers betting offshore believed they were gambling legally. However, the same report also found that bets placed offshore had dropped in states where regulated gambling was available. 

It’s clear that in many Americans’ minds, offshore betting sites are just as legal as regulated ones, at least in states that already have gaming laws in place.  

Match-Fixing Now Easier Than Ever

In addition, it’s now easier than ever to bet on pretty much every market in every sport. That has made it easier for match-fixing syndicates to appear around the world. 

In 2023, an investigation into tennis betting found a ring containing 180 match-fixers. Low-paid tennis players were paid to throw points in return for cash. Global sports bettors bet in-play on the changing scores and cleaned up. 

It’s a problem for newly-regulated markets like New Jersey and Connecticut. Though some betting is banned on college sports, it’s easy for criminals to put pressure on sportsmen and women and bet on the outcome of games that sportsbooks may not pay much attention to. 

The Growth of Mobile Betting & Offshore Gambling

With access to offshore sites via mobile phones, laptops, and VPNs, it’s never been easier to bet at unregulated betting sites. In addition, Americans face few, if any, consequences from the authorities for gambling with offshore casinos and sportsbooks. 

With offshore gambling firms based safely offshore in jurisdictions like Curacao, they continue to offer games to Americans. The biggest problem is a lack of awareness in what offshore gambling companies offer. 

The industry in 2024 is very different from the one in the mid-2000s – where some poker companies were actively stealing money from players and switching on the God Mode on their software. 

However, US players must still tread carefully when placing bets at illegal gambling sites. There’s little recourse for clawing back lost profits or challenging non-payment of bonus cash. 

More US states are regulating online betting, and that can only be good news for gamblers long-term. Ultimately, only fair and regulated companies will be left standing, provided players receive the right information on how to avoid being scammed by offshore sites.