Digital gambling platforms, featuring online casinos and sports betting, propel the commercial gaming sector to unprecedented financial heights
In the rapidly expanding world of online gambling in the United States, a significant challenge looms for the regulated iGaming sector. As of 2025, unregulated online gambling websites dominate the market, accounting for an staggering 74% of the $90.1 billion online market [1]. These illegal platforms operate through unlicensed offshore entities, growing by 64% in 2024 and outnumbering legal ones by a wide margin [1].
This illegal sector's impact on the regulated US iGaming industry is profound. Legal operators, who must comply with strict regulations and taxes, are at a disadvantage, losing potential revenue and market share [1]. While the legal sector grew by 26% in 2024, the illegal growth was even faster, suggesting persistent challenges for regulation and revenue capture [1].
In response, state regulators and attorneys general have intensified enforcement actions against these unlicensed operators and sweepstakes casinos. States such as Michigan, Maryland, Connecticut, New York, Louisiana, and West Virginia have taken strong measures in 2025 to combat these illegal platforms [2]. However, these regulatory crackdowns have yet to stem the illegal market's rapid expansion.
A coalition of over 50 state attorneys general has called on the U.S. Department of Justice to deploy stronger federal enforcement tools against illegal offshore operators. They highlight the harm caused by such platforms, including fraudulent schemes, problem gambling, lost tax revenue (over $4 billion annually), and links to criminal activities like money laundering and human trafficking [3].
Despite these challenges, the regulated US iGaming market is not without its successes. In 2024, the market saw a 7.5% year-over-year growth, marking the fourth straight record revenue year for the commercial gaming industry [4]. The United States commercial gaming industry reached a new high in 2024, totaling more than $71.9 billion in revenue [4].
However, the unregulated sector remains a major concern. Controversial "sweepstakes" platforms, which some critics claim constitute illegal gambling, are a growing threat to the regulated iGaming market [4]. Unregulated skill games are also a concern, as they are widespread in several states and threaten brick-and-mortar casinos [4].
The American Gaming Association (AGA) continues to focus on addressing this issue, with Bill Miller, AGA President and CEO, stating that the AGA remains committed to fostering growth that benefits consumers, operators, and communities alike [4]. The AGA believes that unregulated skill games undermine the industry's integrity and the community's well-being [4].
In summary, while the regulated US iGaming market is growing, it faces significant challenges from a dominant and expanding illegal online gambling sector. State and federal authorities are increasing enforcement efforts, but the illicit sector remains a major disruptor as of mid-2025. The AGA's continued focus on addressing this issue is crucial for the future of the regulated iGaming industry in the United States.
References: [1] American Gaming Association Report, February 19, 2025. [2] State Regulatory Actions Against Unlicensed Operators, 2025. [3] Coalition Letter to U.S. Department of Justice, 2025. [4] American Gaming Association Annual Report, 2024.
- The American Gaming Association (AGA) is concerned about unregulated sports betting and iGaming, as they threaten the integrity of the regulated industry and the community's well-being.
- The unregulated online gambling sector, accounting for 74% of the $90.1 billion market [1], is rapidly expanding, operating through unlicensed offshore entities and dominating the market.
- The American Gaming Association (AGA) sees the growth of controversial "sweepstakes" platforms, which some claim are illegal gambling, as a threat to the regulated iGaming market.
- The American Gaming Association (AGA) also highlights unregulated skill games as a concern, as they are widespread in several states and threaten brick-and-mortar casinos.
- The American Gaming Association (AGA) believes that these unregulated skill games undermine the industry's integrity and the community's well-being, and continues to focus on addressing this issue.
- State and federal authorities are increasing enforcement efforts against these unlicensed operators and sweepstakes casinos, as they cause harm including fraudulent schemes, problem gambling, lost tax revenue, and links to criminal activities like money laundering and human trafficking [3].
