Illegal sports betting remains a massive business in the US, but its share of the market is shrinking as more bettors turn to legal options, according to research from the American Gaming Association.
In the past year, Americans wagered about $84 billion through illegal sportsbooks and bookies compared to $172.1 billion for the trailing 12 months through June 30, according to Wednesday‘s report. That illegal handle is nearly 33% of the total market, down from 2022 when the AGA estimated 40% of handle was bet offshore, even as illegal wagers increased by roughly $20 billion.
That translated to an estimated $5 billion in revenue for illegal operators, whose share of the US sports betting market fell to 24%, down from 36% three years ago. The AGA estimates that still cost states $1 billion in lost gaming tax revenue over the past year.
“Illegal gambling operators are thriving at the expense of American consumers, siphoning billions in tax revenue from state governments, and undercutting the efforts of the legal market,” said AGA President and CEO Bill Miller. “It’s time for a national crackdown on the pervasive illegal market that is draining state coffers and putting people at risk.”
Legal betting outpaces offshore
The legal sports betting market has more than doubled since 2022. The AGA estimates regulated operators generated about $16 billion in revenue over the past 12 months, compared to $6.8 billion in 2022.
“Although the illegal sports betting market has risen in absolute terms, it makes up a significantly smaller portion of total sports betting than it did three years ago,” the AGA wrote in its findings.
Sports betting is now legal in 40 jurisdictions, up from 31 in 2022, the report notes.
How bettors are wagering
The AGA’s survey of 2,366 adults aged 21 and over found:
- 54% of sports bettors said they bet exclusively through legal channels.
- 36% use both legal and illegal options.
- 10% bet only illegally, down from 15% in 2022.
Still, more bettors said they placed at least some illegal wagers in 2025 than in the prior survey.
Northeast overtakes South as most likely to bet offshore
In a reversal from 2022, bettors in the Northeast, where sports betting is widely legal, were the most likely to say they still wager through illegal channels, at 15%.
The South had led the list in 2022, at 11.7%. Nationwide, the share of adults likely to bet illegally rose from 9.5% in 2022 to 12.6% this year.
The bigger illegal market
Across all forms of gambling, Americans wagered an estimated $673.6 billion illegally in the past year. That is up from 2022 but accounted for a smaller share of the total market. Illegal operators accounted for about two-thirds of US online casino play, while unregulated gaming machines also remain widespread.
The AGA is the main trade group representing US commercial and tribal casino operators, sports betting companies and gaming suppliers.
The AGA worked with The Innovation Group to conduct the survey of 2,454 adult Americans about their gambling habits, 2,366 of which were 21+. Researchers adjusted self-reported spending using publicly available revenue data from legal markets and machine counts from regulated states to account for under- and over-reporting.
