A new analysis from the American Gaming Association (AGA) finds that Americans wager a total $673.6 billion annually with illegal and unregulated gambling operators, diverting activity away from licensed operators and denying communities critical resources that fund infrastructure, education, and public safety.

Driven by a sharp rise in illegal iGaming, expanding use of unregulated skill machines, and persistent illegal sports betting, the illegal market has grown 22% since AGA’s last report in 2022. Growth in the legal market in recent years has kept the illegal market’s share of total U.S. gaming revenue largely steady – with illegal operators capturing smaller shares of sports betting and iGaming revenue – but illegal operators still account for nearly one-third (31.9%) of the total U.S. gaming market.

The illegal and unregulated gambling market generated an estimated $53.9 billion in annual revenue for offshore betting rings and unregulated machine operators, robbing state governments of $15.3 billion in taxes each year.

“Illegal gambling operators are thriving at the expense of American consumers, siphoning billions in tax revenue from state governments, and undercutting the efforts of the legal market,” said AGA President and CEO Bill Miller. “It’s time for a national crackdown on the pervasive illegal market that is draining state coffers and putting people at risk.”