The US illegal gambling market grew dramatically in 2025, according to a new report commissioned by the Campaign for Fairer Gambling and published by Gaming Compliance International.
The study claims unlicensed sites and apps now account for 77% of the total US online gambling market by gross gaming revenue, up from a reported 74% in 2024.
According to the report, the illegal sector grew from $67.1bn in 2024 to $97.4bn in 2025, representing an increase the report puts at 45.2%.
By comparison, the regulated online gambling sector grew from $23bn to $28.3bn over the same period, a rise of approximately 23%.
Combined, overall online gambling losses across both sectors rose from $90.1bn in 2024 to $125.6bn in 2025, an increase of 39.4%.
The report argues that legalising online sports betting and casino games has not curbed the growth of illegal operators, but has instead expanded the overall addressable market.
Derek Webb, who funds the Campaign for Fairer Gambling, said: “The legal sector uses the presence of the illicit sector to demand legalisation, then asks for low tax and regulation to compete against the illicit sector.”
Webb added: “Taking action against bad actors in the illicit sector is the solution and must be the priority for all stakeholders.”
GCI’s analysis centres on what it calls a loss ratio, a measure dividing state GGR by state population and income to show gambling losses as a proportion of income per capita.
States with both legal online sports betting and casino recorded an average loss ratio of 1.38% in 2025, which the report said was three times higher than the 0.44% in states where neither product is legalised.
Louisiana was identified as the state with the highest ratio of gambling spend to income, as well as the highest ratio of unregulated gambling expenditure to income.
California, which has not legalised any form of online gambling, recorded a loss ratio of 0.43%, which the report attributed entirely to illegal activity.
West Virginia, which has legalised both online sports betting and casino gaming, recorded a loss ratio of 1.57%, with 0.87 percentage points attributed to the illicit sector.
The report’s authors argued the data supports pausing further market expansion until stronger enforcement action is taken against illegal operators.
GCI’s figures have faced scrutiny previously, with Forbes highlighting a past report’s estimate on global crypto gambling revenue at $81.4bn, a figure challenged by blockchain analytics firm Tanzanite.
Tanzanite placed its own estimate for the total size of that sector closer to $10bn, around half of which was Stake.com self-reported revenue.
In response, Webb told the business magazine that legal market estimates had been proven correct ahead of official data publication and that he had seen detailed non-public work leaving no reason to question the report’s validity.
Webb also stated: “Jurisdictions around the world have given safe harbour to criminals and pirates from the illicit sector. There has been an abject lack of attention by authorities around the world towards the economic war effectively declared by these jurisdictions.”
The report was commissioned and funded by the Campaign for Fairer Gambling, an advocacy group that has consistently argued against gambling market expansion, and its full methodology and underlying data have not been made publicly available.
