US unlicensed online gambling market surges to estimated $97.4bn

The Campaign for Fairer Gambling has highlighted the scale of the US online gambling market in 2025, citing an analysis from Gaming Compliance International that estimates unlicensed activity generated approximately $97.4 billion in gross gaming revenue during the year. According to the analysis, that represented a 45.2% increase from the previous year and significantly outpaced the growth recorded by regulated online gambling.

The figures form part of an analysis commissioned by the Campaign for Fairer Gambling and prepared by Gaming Compliance International. Because the figures are estimates rather than official government statistics, they should be understood as an assessment of market activity rather than a definitive accounting of every transaction conducted in the United States.

The analysis estimates that regulated online gambling generated $28.3 billion in revenue in 2025, representing growth of approximately 23%. By comparison, the estimated unlicensed market expanded at nearly twice that rate.

Taken together, the figures indicate a substantial difference between the size of the regulated market and the estimated activity occurring outside state licensing systems. The findings have renewed attention on the effectiveness of current US online gambling regulation and enforcement.

Unlicensed activity remains a major part of the market

One of the most significant findings is the estimated share of online gambling attributed to unlicensed operators. Gaming Compliance International estimates that unlicensed websites and applications represented approximately 77% of total US online gambling gross gaming revenue in 2025, compared with an estimated 74% in 2024.

That change is important because the expansion of regulated gambling has often been viewed as a mechanism for moving consumers away from offshore or otherwise unlicensed services. The analysis suggests that this transition may be more complicated than a simple shift from illegal to legal channels.

The figures indicate that regulated operators continued to grow during 2025 while unlicensed activity expanded at a faster pace. This does not necessarily establish why consumers choose one channel over another. Factors such as product availability, geographic restrictions, promotional offers, payment options and consumer awareness can all influence market behaviour.

The distinction between regulated and unregulated activity is also legally significant. Licensed operators operate under state-specific rules covering areas such as age verification, responsible gambling, advertising, taxation, financial controls and consumer protection. Operators outside those frameworks may not be subject to the same requirements.

Overall gambling losses increased sharply

The analysis also estimates that total US online gambling losses increased from approximately $90.1 billion in 2024 to $125.6 billion in 2025, representing growth of about 39.4%.

These figures reflect the methodology used in the underlying analysis and should not be interpreted as a direct measure of the amount of money lost by every individual consumer. In gambling market reporting, revenue and loss measurements can depend heavily on the definitions and methodology applied to gross gaming revenue, wagering activity and consumer spend.

Nevertheless, the reported increase points to a rapidly expanding digital gambling environment. It also highlights the growing importance of accurate market measurement as US states continue to adopt different approaches to online sports betting and casino gaming.

The figures cited for regulated and unregulated markets may also differ slightly from simple arithmetic comparisons because of rounding and methodological treatment within the underlying analysis.

State regulation produces different market outcomes

The US online gambling market remains highly fragmented because gambling regulation is largely determined at state level. Some jurisdictions permit online sports betting while restricting online casino gaming. Others have introduced both products while several major states continue to prohibit one or both forms of online gambling.

Gaming Compliance International used a loss ratio to compare estimated online gambling revenue per person with income per person. The analysis estimates that states permitting both online sports betting and online casino gaming recorded an average ratio of 1.38% in 2025.

That figure compared with an estimated 0.99% in states where only online sports betting was regulated and 0.44% in states where neither product was legally available.

The figures should not be treated as proof that regulation itself causes higher gambling losses. A range of economic, demographic and market factors can affect gambling participation. Instead, the ratios provide a basis for comparing different regulatory environments within the methodology used by the report.

Louisiana highlights the complexity of the market

Louisiana is identified in the analysis as having the highest loss ratio among the states examined. The state also recorded a substantial estimated share of activity attributed to unregulated gambling.

Louisiana has a regulated online sports wagering framework but does not have a broad regulated online casino market. Its regulatory structure therefore illustrates one of the differences between states that have legalised sports betting and those that have also authorised online casino products.

The Louisiana Gaming Control Board is responsible for regulating gaming activities under Louisiana law. Its framework includes provisions covering sports wagering, licensing and regulatory oversight.

The presence of regulated sports betting alongside estimated unlicensed activity demonstrates why market regulation can involve more than simply authorising a legal product. Regulators must also consider enforcement, consumer education and the ability of licensed operators to compete for legitimate customers.

West Virginia offers a different example

West Virginia provides another example highlighted by the analysis. The state permits both online sports betting and online casino gaming and recorded an estimated loss ratio of 1.57% in 2025.

The report attributes approximately 0.87 percentage points of that ratio to unregulated activity. In other words, the analysis suggests that a meaningful portion of the state's estimated online gambling activity remained outside the regulated framework even though consumers had access to legal products.

This finding is relevant to the wider debate about whether market expansion automatically reduces the role of unlicensed operators. The available estimates suggest that legal availability and illegal activity can coexist rather than one immediately replacing the other.

That conclusion should still be treated cautiously. Market estimates are influenced by methodology and data availability and do not independently establish consumer motivations or the legal status of every individual operator.

California illustrates another regulatory model

California presents a contrasting example. The state does not currently permit regulated online sports betting or online casino gaming, although it maintains a regulated land-based gambling sector.

Gaming Compliance International's analysis estimates a 0.43% loss ratio for California and attributes the entire amount within its model to unregulated online gambling activity.

California's gambling regulatory structure is administered through state authorities including the California Gambling Control Commission and the Bureau of Gambling Control. The state's framework covers regulated gambling activities such as cardrooms and tribal gaming while online sports betting remains outside the state's authorised market.

The California example is significant because it demonstrates how consumers may continue to participate in online gambling even where specific forms of digital gambling are not authorised by state law.

Enforcement becomes a central policy issue

The findings have contributed to a wider policy debate over how the United States should address unlicensed online gambling. The Campaign for Fairer Gambling has argued that enforcement against illegal operators should receive greater attention alongside discussions about taxation and the design of regulated markets.

Derek Webb, founder of the Campaign for Fairer Gambling, has been an active advocate for gambling reform. The organisation's own materials describe Webb as its founder and explain that he supports reforms concerning gambling policy and harm reduction.

His position forms part of an ongoing policy debate rather than an established conclusion about the most effective regulatory approach. Policymakers, regulators, licensed operators and consumer protection organisations may differ significantly over taxation, market access, advertising rules and enforcement priorities.

For regulators, one of the principal challenges is identifying and disrupting activity that operates outside established licensing systems while maintaining effective protections for consumers using legal platforms.

What the figures mean for the US market

The reported 2025 figures suggest that the US online gambling market has reached a point where the relationship between legalisation and unlicensed activity deserves closer examination.

The growth of regulated markets remains significant. However, the estimated expansion of unlicensed activity indicates that legalisation alone may not eliminate offshore or otherwise unauthorised gambling. The effectiveness of any regulatory model may depend on how well it combines licensing with enforcement, consumer protection and practical access to legal products.

For licensed operators, the findings also raise questions about competition. Companies investing in compliance, taxation, responsible gambling systems and regulatory obligations may face competition from businesses that do not carry equivalent costs.

For governments, the issue has a fiscal dimension. When gambling activity occurs through regulated channels, states can impose licensing conditions and collect taxes while requiring consumer protection measures. Activity outside those systems may reduce the effectiveness of those mechanisms.

Conclusion

The Campaign for Fairer Gambling's latest US-focused analysis presents a striking picture of online gambling activity in 2025. Gaming Compliance International estimates that unlicensed activity generated $97.4 billion in gross gaming revenue while regulated online gambling produced $28.3 billion. The analysis further estimates that unlicensed activity represented 77% of the total US online gambling market.

These figures should be viewed within the limits of the underlying methodology and should not be treated as official government measurements. Even so, they raise important questions about how effectively existing state-based systems are capturing the online gambling activity taking place among US consumers.

The central policy issue is therefore broader than whether states should legalise additional forms of online gambling. It concerns whether regulation can create a sufficiently competitive and accessible legal market while maintaining strong standards for consumer protection and enforcement.

As the US market continues to develop, policymakers are likely to face increasing pressure to address the relationship between legal availability and unlicensed activity. The 2025 estimates provide one perspective on that challenge and underline the need for transparent data, consistent enforcement and evidence-based regulation as the digital gambling sector continues to evolve.

FAQs

What is the estimated size of the US unlicensed online gambling market in 2025?
Gaming Compliance International estimates that unlicensed online gambling generated approximately $97.4 billion in gross gaming revenue in the US during 2025.

How much did regulated online gambling generate in the US in 2025?
The analysis estimates that regulated online gambling generated approximately $28.3 billion in revenue during 2025, representing growth of about 23%.

What share of US online gambling was estimated to be unlicensed?
Gaming Compliance International estimates that unlicensed websites and applications accounted for approximately 77% of total US online gambling gross gaming revenue in 2025.

Does legalising online gambling eliminate illegal gambling?
The available estimates suggest that legalisation does not automatically eliminate unlicensed activity. Legal and unlicensed markets can continue to operate alongside each other depending on state rules, consumer behaviour and enforcement.

Why is unlicensed online gambling a regulatory concern?
Unlicensed operators may operate outside state licensing requirements involving consumer protection, responsible gambling, age verification, taxation, advertising and financial controls. This can make enforcement and consumer protection more difficult.

What is the loss ratio used in the analysis?
The loss ratio compares estimated online gambling revenue per person with income per person. It is used by the analysis to compare gambling exposure across different states.

Which state recorded the highest loss ratio in the analysis?
Louisiana was identified as having the highest loss ratio among the states examined by Gaming Compliance International.

What did the analysis estimate for West Virginia?
The analysis estimates that West Virginia recorded a 1.57% loss ratio in 2025, with approximately 0.87 percentage points attributed to unregulated activity.

What does the analysis say about California?
The analysis estimates a 0.43% loss ratio for California and attributes the amount within its methodology to unregulated online gambling because the state does not currently regulate online sports betting or online casino gaming.

What could the findings mean for future US gambling policy?
The findings may strengthen calls for closer enforcement of unlicensed gambling while also encouraging policymakers to assess whether existing regulated markets are sufficiently accessible, competitive and effective in protecting consumers.