Key Points
- According to Gaming Compliance International, illegal online gambling in the US was able to generate $97.4 billion in gross gaming revenue in 2025, capturing 77% of the total US online market.
- According to the American Gaming Association, the market is worth $53.9 billion altogether, resulting in nearly a four-to-one ratio driven by completely different accounting techniques.
- However, both studies come to the same conclusions – legalisation does not control illegal operator growth, and enforcement is unable to catch up with the issue at the state level.
Gaming Compliance International (GCI), a firm hired by the Campaign for Fairer Gambling (CFG), released an October 2026 report which stated that the unlicensed online gambling sites took in $97.4 billion in total gambling revenue from the US customers in 2025. The number requires further analysis at the very beginning. The American Gaming Association announced in February 2026 that the total annual gambling income for all the legal commercial gambling market sectors, including both brick-and-mortar casinos and Internet gambling (iGaming), was at a record $78.72 billion in 2025.
It is a huge number even considering that GCI estimated it for an illegal market segment.
Legalisation Has Not Reduced the Illegal Market
According to the GCI report, increased gambling legality has not played any role in taking customers off illegal gambling sites. The total income of illegal gambling has increased from $67.1 billion in 2024 to $97.4 billion in 2025, marking a 45.2% growth. The online legalised gambling industry has also grown from $23 billion to $28.3 billion in 2025, representing a 23% increment. In both sectors, the total loss of online US gambling increased from $90.1 billion in 2024 to $125.6 billion in 2025, which marked a 39.4% increase.
Derek Webb, the inventor of Three Card Poker who funds the CFG, led the UK campaign that reduced maximum stakes on fixed-odds betting terminals from £100 to £2 in April 2019, with FOBT revenue falling by around £750m in the year that followed. Since 2023, he has led the same campaign in the United States. His position on legalisation is direct. “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,” he told iGaming NEXT. His solution is enforcement, not further market opening. “Taking action against bad actors in the illicit sector is the solution and must be the priority for all stakeholders.”
He went further on the regulatory failure: “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.”
How Does GCI Build Its Estimate?
GCI’s method differs from the survey-based approach most researchers use. The firm runs keyword sweeps across every commercial gambling destination reachable within a US jurisdiction, then prices that traffic against verified legal-market data using machine learning, a model it calls value per visit. Its case against consumer surveys is straightforward: illegal operators do not file tax returns, so asking gamblers what they spend produces conservative and unreliable figures.
At the state level, GCI applies what it calls a loss ratio: GGR divided by population and income, expressed as gambling losses per capita as a share of income. States with both legal online sports betting and casino gaming averaged a 1.38% loss ratio in 2025, three times the 0.44% in states where neither product exists legally. Louisiana recorded the highest ratio of unregulated gambling spend to income in the country, with the report stating most of that activity flowed to illegal operators. West Virginia, which has legalised both products, posted a 1.57% loss ratio, with 0.87 percentage points attributed to the illicit sector. California, which has legalised neither product, recorded 0.43%, entirely from unlicensed sources.
A Near Four-to-One Gap With the AGA
The American Gaming Association published its own illegal-market analysis in August 2025, conducted by research firm The Innovation Group using a survey of 2,454 US adults and on-the-ground counts of unregulated machines. The AGA put the full illegal sector at $53.9bn in annual revenue, representing 31.9% of the total US gaming market, with $15.3bn lost to state tax coffers. Remove $30.3bn attributed to unregulated skill machines, and illegal online gambling specifically comes to $23.6bn under the AGA’s methodology.
The gap between $23.6bn and $97.4bn for the same category of the same market is not a rounding error. It reflects a fundamental split in how each organisation measures something that does not report itself. The AGA asks people what they did; GCI tracks where internet traffic goes. Consumer surveys likely undercount because gamblers under-report. Traffic modelling captures reach and applies conversion assumptions that cannot be independently audited. Neither method is definitive.
Even on the AGA’s more conservative count, the trend is not reassuring. Illegal iGaming revenue grew nearly 38% to $18.6bn since 2022, and one in ten US sports bettors still place all their wagers with unlicensed operators. By either measure, regulation has not contained the market.
GCI’s Track Record Under Challenge
When GCI previously estimated global crypto-gambling revenue at $81.4bn, blockchain analytics firm Tanzanite tracked more than 90 wallet addresses and returned a figure above $10bn, with roughly half of that attributable to Stake.com’s own disclosed revenue. Forbes covered the discrepancy on 10 August 2026, the same day the US report was published.
Webb maintains that GCI has consistently produced accurate pre-publication estimates of legal markets, and that he has reviewed non-public methodology in sufficient detail to be satisfied. The conflict-of-interest picture around this debate matters. The AGA represents licensed operators who benefit from framing illegal gambling as a case for further legalisation. GCI sells monitoring technology to governments, giving it a commercial interest in a larger problem. Webb funds the research personally and has no revenue outcome tied to the result. That does not confirm the $97.4bn figure, but it does affect how each party’s position should be weighed.
Where the Enforcement Gap Sits?
GCI’s US report connects to a broader global picture the firm published in May 2026. That report put total global unregulated online gambling wagering at $5.9 trillion in 2025, up 4% from $5.7 trillion in 2024, with unlicensed operators taking 78% of worldwide online gambling GGR. It also recorded that more than 80% of illegal sports streams viewed in the US and UK across 2024 and 2025 carried advertising from unregulated betting companies.
State enforcement has been targeted rather than coordinated. The AGA’s State of the States 2026 report noted that Florida, Michigan, Mississippi, and Tennessee took action against offshore sportsbooks and casinos in 2025, while Missouri, Pennsylvania, and Virginia addressed unregulated skill machines through courts and legislation. These are individual state responses to a market operating across every jurisdiction at once.
The CFG has called for a halt to further market expansion until enforcement is materially strengthened, a direct challenge to the legal industry’s argument that regulated access displaces illegal play. The GCI data, contested as it is, does not support that argument. No US federal body or shared state framework has produced a standard, auditable method for measuring the illegal market. Without that baseline, enforcement stays reactive and the policy debate repeats itself.
Expert Analysis
The $97.4bn figure will face continued challenge, and rightly so: GCI does not publish its methodology in a form that allows independent replication. What is not disputed is that unlicensed operators reached US consumers at significant scale in 2025, that legalisation has not reversed that trend, and that state governments lost substantial tax revenue to a market operating openly online. The central question, what enforcement mechanism at what level of government will actually reduce the illegal market, remains unanswered. Until it is, the figures in the next report will be larger.
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