The Campaign for Fairer Gambling (CFG) has unveiled a new report created in collaboration with market intelligence platform Yield Sec. This report underscores a rise in consumer losses in states that legalize online gambling without effectively tackling the unlicensed market.
Campaign for Fairer Gambling Presents Alarming Findings
The report reveals significant increases in consumer harm in states where online gambling is either partially or fully legalized, especially when there is minimal enforcement against unlicensed operators. CFG classifies US states into three regulatory categories: those without legal online gambling (such as California and Texas), those allowing only online sports betting (like New York and Florida), and those permitting both online sports betting and online casino games (including Michigan and New Jersey). The report uses gross gaming revenue (GGR) per capita as a percentage of average income in 2024 to assess gambling losses across these groups.
Nationally, the combined GGR from both licensed and unlicensed online gambling averages 0.62% of income per capita. Conversely, states without any legal online gambling report substantially lower losses, averaging just 0.31% of income. However, in states where only online sports betting is legal, GGR per capita rises to 0.77% of average income. This figure further increases in states where both online sports betting and online casino gambling are legal, reaching 1.12% of income per capita, approximately 3.6 times higher than in states without any legal online gambling.
74% of Online GGR in the US Goes to Unlicensed Operators
The report also highlights the structural flaws in the current regulatory framework. Unlicensed gambling operators can offer more value to consumers with larger bonuses and fewer restrictions, as they avoid compliance costs like taxes and licensing fees. The lack of strong oversight and enforcement allows these operators to thrive unchecked, directly competing with licensed providers and undermining the integrity of the regulated gambling system.
CFG states that without strong measures to control and monitor unlicensed gambling, the legal industry struggles to compete effectively. Consequently, the expansion of legalized gambling tends to enlarge the overall market, including the unlicensed sector, instead of directing players toward regulated platforms.
CFG refers to certain state-level regulatory strategies as a systemic failure to fully govern the entire online gambling landscape. For instance, states like New York and Florida, which have legalized sports betting but not online casino gambling, are witnessing significant increases in per capita gambling losses. Conversely, states such as Michigan and New Jersey, where both sports betting and online casino gambling are legal, experience the greatest relative impact on consumer income.
The report concludes that the “zero-sum” theory, which posits that licensed operators’ gains come at the expense of unlicensed ones, does not reflect reality. Instead, the unlicensed market expands alongside legal gambling options, increasing financial harm to consumers. CFG and Yield Sec assert that this situation necessitates an urgent regulatory overhaul that prioritizes not only legalization but also strong enforcement against unlicensed gambling platforms.
- SCCG Management. The Gambling Industry’s Global Connector. Access Here.
- Source: SCCGManagement.com