A recent report from Gaming Compliance International (GCI), commissioned by the Campaign for Fairer Gambling (CFG), reveals that illegal online gambling operators in the United States experienced revenue growth nearly double that of the licensed sector last year.
The study indicates that unregulated websites and applications amassed a staggering $97.4 billion in gross gaming revenue (GGR) from American consumers in 2025, a significant increase from $67.1 billion in 2024.
This marks a growth rate of 45.2%, in stark contrast to the 23% increase observed in the regulated online gambling sector, which rose from $23 billion to $28.3 billion during the same timeframe.
Overall, losses from online gambling—both legal and illegal—escalated from $90.1 billion in 2024 to $125.6 billion in 2025, reflecting a 39.4% rise, according to the findings.
Unlicensed platforms now represent 77% of the total online gambling market in the U.S. by GGR, up from 74% the previous year.
The report suggests that the legalization of online sports betting and casino gaming has not curtailed the growth of illegal operators. Instead, GCI posits that legalization has broadened the overall gambling market while unregulated entities continue to thrive.
Derek Webb, a supporter of CFG, commented, “The legal sector leverages the existence of the illicit sector to advocate for legalization, then requests minimal taxes and regulations to compete.” He emphasized that addressing the issues posed by illegal operators should be a priority for all involved parties.
Furthermore, GCI introduces a metric known as the Loss Ratio, which compares gambling GGR per capita to income per capita, illustrating gambling losses as a percentage of income.
States that permit both online sports betting and casino gaming reported an average Loss Ratio of 1.38% in 2025. In contrast, states with legal online sports betting but no online casino averaged 0.99%, while states lacking both options recorded a Loss Ratio of 0.44%.
The data reveals that gambling losses relative to income were highest in states offering both regulated online sports betting and casino gaming. However, significant unregulated activity remains evident across various regulatory frameworks.
Louisiana topped the list with the highest gambling spending-to-income ratio, as well as the most substantial unregulated gambling expenditure relative to income, primarily attributed to illegal operators.
West Virginia, where both online sports betting and casino gaming are legal, reported a total Loss Ratio of 1.57%, with 0.87 percentage points linked to the unregulated sector.
Conversely, California, which does not permit either online sports betting or casino gaming, recorded a Loss Ratio of 0.43%, solely attributed to unregulated activities.
The state-level comparisons reinforce the report’s overarching conclusion that the existence of regulated online gambling does not eliminate the demand for unregulated operators.
The CFG asserts that the disparity in growth between regulated and unregulated sectors calls for more decisive actions against illegal operators before any further expansion of online gambling.
It is important to note that CFG, the advocacy organization that commissioned and funded this report, has consistently opposed the expansion of the gambling market.