Illegal Gambling Robs U.S. of $13.3B in Annual Tax Revenue, AGA Report Shows

• Americans Gamble an Estimated $511 billion Using Illegal and Unregulated Sportsbooks

• Illegal Wagering Robs State Governments of $13.3 billion in Tax Revenue Annually

• AGA President: “Illegal and Unregulated Gambling is a Scourge on Our Society”

Americans Gamble an Estimated $511 billion Using Illegal and Unregulated Sportsbooks

Wear a mask and steal $13.3 billion from America and chances are you’ll be looking at serious prison time, but when illegal and unregulated sportsbooks and iGaming websites and so-called “skill games” pull off that same caper annually, who to prosecute and jail is not so obvious.

According to a recent report from the American Gaming Association (AGA), Americans illegally gamble an estimated $511 billion each year using those various risky entities that are only happy to take their money, which means a loss of $13.3 billion in potential tax revenue a year.

AGA President and CEO Bill Miller sees it as more than just a potential financial loss, non-taxable illegal wagering prevents the various states from funding projects that help the residents, often who are underprivileged, saying:

“We have always known that the illegal and unregulated market is expansive, but this report illuminates just how pervasive it is.”

According to that AGA report, those unregulated sites are capturing nearly 40 percent of the U.S. sports betting market, too high a figure to ignore once you start doing the math on how much that is costing citizens in terms of missing tax revenue.

It really does add up.

Illegal Wagering Robs State Governments of $13.3 billion in Tax Revenue Annually

The AGA reports that the amount U.S. states lose annually in potential tax revenue from illegal sports betting – $13.3 billion – is nearly $2.5 billion more than legal operators generated in 2021 ($11.7 billion).

This illicit gambling also affects the legal gaming industry’s bottom line, according to the AGA, since those unregulated sportsbooks rob them of $44.2 billion in annual revenue, which is nearly half of the $92 billion in combined commercial and tribal revenue in 2021.

Here’s how the ‘robbery’ breaks down according to the AGA:

·       $63.8 billion with illegal bookies and offshore sites at a cost of $3.8 billion in gaming revenue and $700 million in state taxes

·       $337.9 billion with illegal iGaming websites, with a loss of $3.9 billion in state tax revenue

·       40% of all gaming machines in the U.S. are unlicensed

AGA President and CEO Miller believes this is everyone in the industry’s struggle, saying that all stakeholders—policymakers, law enforcement, regulators, and legal businesses—must “work together to root out the illegal and unregulated gambling market.”

Plus, it just doesn’t look good for the country.

AGA President: “Illegal and Unregulated Gambling is a Scourge on Our Society”

Once the U.S. Supreme Court overturned PASPA in May 2018 and turned over the right to legalize, regulate, and tax a sports betting market to each state, over thirty of them have done just that, but that still leaves quite a few areas without legal options to bet.

That gap in availability feeds the unregulated and illegal sports betting market, and that has been an ongoing issue that affects every player in the legal gambling world on both sides of the bet, and AGA President and CEO Miller understands this and says in the report:

“Illegal and unregulated gambling is a scourge on our society, taking advantage of vulnerable consumers, skirting regulatory obligations, and robbing communities of critical tax revenue for infrastructure, education, and more.”

Once legal sports betting and general gambling are available freely to all U.S. citizens in every state (the way alcohol and cigarettes and marijuana are), then maybe those bad characters stealing U.S. dollars right from under our noses will no longer find a demand to satisfy.