CFG study: Illegal gambling takes $9.5bn in revenue from three states

May 31, 2024
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Research revealed that nearly 800 illegal operators are present throughout New York, New Jersey and Minnesota.

The Campaign for Fairer Gambling (CFG) and Yield Sec (YS) have published a new report, showing that $9.5bn has been generated in three states by illegal gambling operators.

The study focused on illegal gaming activity in New York, New Jersey and Minnesota.

Online sports betting is currently legal in New York State. However, illegal iGaming operators in the Empire State have walked away with nearly half of the total online gross gaming revenue (GGR), according to the report. Illegal online casino gambling grabbed $3.4bn of the state’s GGR, while another $1.9bn came from illegal online sports wagering.

Though the percentages were not as high for illegal activity in New Jersey, the Garden State lost nearly $1bn to illegal online sports betting, accounting for 22% of the total GGR. Another 16%, or $719m, was lost to illegal iGaming.

Both online sports betting and iGaming are legal in the state of New Jersey.

The CFG report told a different story in Minnesota, where online gaming and online sports betting are currently against the law. Illegal online sports betting generated $929m in revenue, while another $1.5bn in revenue came from illegal online casino gambling.

CFG Founder Derek Webb suggested federal intervention could be necessary to combat this trend.

He commented, “The dominance of illegal online gambling operators remains unchallenged despite the expansion of legal gambling. Sector-friendly legislation, regulation and tax rates have not made much of a dent. Despite wildly different legal regimes, these three states continue to accommodate over 800 illegal operators who operate with zero regard for state law.

“This is one reason why we need federal involvement in the oversight of online gambling. We are eager to equip policymakers with real, reliable data, so that we can have more informed, balanced debate and ultimately smarter gambling policy.”

Yield Sec CEO and Founder Ismail Vali agreed with Webb by saying, “This data and analysis exposes a stark reality: Illegal gambling operators are brazenly stealing money from state and federal coffers, and legitimate American industry.

“It’s time for the federal government to end this theft in broad daylight.”

State-by-State

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