Illegal activities dominate the US online gambling market according to a study, with a staggering 74% operating outside of legal bounds.
In a groundbreaking analysis, Yield Sec, a leading data intelligence firm, has shed light on the vast extent of illegal gambling activities in the United States iGaming landscape. The findings, backed by The Campaign for Fairer Gambling, paint a grim picture of the current state of gambling regulation in the country.
According to Yield Sec's estimates, a staggering 70% of current gambling activity remains focused on illegal channels, dwarfing the numbers presented by mainstream and specialist research firms. This startling revelation is primarily due to Yield Sec's unique, real-time tracking methodology, originally designed for counter-terrorism purposes.
This approach allows for more direct and precise monitoring of unregulated and illegal gambling volumes than traditional research methods. Yield Sec's methodology has been instrumental in tracking gambling volumes for events such as the Super Bowl and March Madness with remarkable accuracy.
One of the key reasons for Yield Sec’s higher illegal market estimates is the use of counter-terrorism tracking techniques adapted to monitor gambling activity. This enables Yield Sec to track real-time unregulated volumes accurately, including emerging sectors like crypto gambling.
Other research often depends on less direct data, missing many illegal operations such as offshore platforms, prediction markets, and sweepstakes casinos, which are significant in the illegal market. The rapid growth of illegal gambling, including a reported 64% year-on-year increase in 2024 and nearly doubling the growth rate of regulated operators, driven in part by cryptocurrency integration, is more fully captured by Yield Sec’s methodology.
Yield Sec's founder, Ismail Vali, argues that the use of illegal means for gambling, particularly cryptocurrency, is a problem not addressed by regulators and lawmakers. The firm has identified tens of thousands of crypto casinos worldwide, raising concerns about the ease with which these activities can be conducted anonymously.
In the US, states like California and Texas, which have no regulated gambling markets, contribute significantly to the total value of the US illegal gambling market, with California contributing $5.5 billion and Texas contributing $4.5 billion respectively.
In Ohio, a state with regulated gaming, the share of the legal market is only 15% of the $6.2 billion market total. This underscores the dominance of illegal channels in the US iGaming landscape.
The new analysis by Yield Sec suggests that approximately 74% of US iGaming activities may be conducted illegally, highlighting the urgent need for stricter regulations and increased efforts to combat illegal gambling activities.
Sports betting, particularly through cryptocurrency, is becoming a growing concern in illegal gambling, due to the lack of regulation and ease of anonymity provided by tens of thousands of crypto casinos worldwide. The findings by Yield Sec reveal that these unregulated activities contribute significantly to the total value of the US iGaming market, with states like California and Texas accounting for over half of the reported illegal gambling activities, amounting to $10 billion collectively.
Despite the existence of regulated casino-and-gambling in states like Ohio, only 15% of the market), the vast majority of casino-games in the United States are estimated to be conducted illegally, with approximately 74% of iGaming activities falling into this category. This stark statistic underscores the urgent need for stricter regulations and increased focus on detecting and curbing these activities in order to ensure fairer gambling practices across the country.
