CFG Report: Legalized Online Gambling Fuels 261% Loss Spike Without Curbing Illegal Market
The Campaign for Fairer Gambling warned that legalizing online gambling without cracking down on illegal operators has driven U.S. consumer losses up 261%, with illegal platforms pocketing 74% of the market.
A Sobering Look at Online Gambling
The Campaign for Fairer Gambling (CFG) dropped a bombshell supplement to its USA National Online Gambling Report 2024, revealing that illegal online gambling grabs 74% of America’s $90.1 billion online gambling revenue.
Commissioned by CFG and powered by Yield Sec’s data crunching, the report slices through all 50 states, showing that legalizing online gambling without tackling illegal operators spikes consumer losses by up to 261% “This isn’t progress, it’s escalation,” said CFG founder Derek Webb.
The CFG supplement groups states by their gambling laws: no legal online gambling (e.g., California, Texas), legal sports betting only (e.g., New York, Florida), or both sports betting and online casinos (e.g., Michigan, New Jersey).
It measures gross gambling revenue (GGR) per capita as a percentage of average income in 2024, exposing the financial hit. Nationally, GGR per capita is 0.62% of income, but it varies sharply.
States with no legal gambling see 0.31%, sports-betting-only states hit 0.77% (a 148% jump), and states with both climb to 1.12% (a 261% surge). Legalization, meant to replace illegal betting, instead fuels overall losses, with illegal operators thriving.
Ohio’s Warning Sign
Ohio stands out as a cautionary tale. One year after legalizing online sports betting in 2023, Ohioans’ gambling losses reached 1.33% of average income per capita, the nation’s highest and over twice the 0.62% national average.
“Ohio is the alarm bell America needs to hear,” Webb said. The state’s legal sports betting handle in 2024 didn’t dent the illegal market, which Yield Sec estimates took $67.1 billion nationally.
Illegal platforms dominate because they dodge taxes, skip licensing, and offer better odds, bigger bonuses, and fewer barriers. Yield Sec’s Ismail Vali noted that these operators “undermine the legal industry at every turn,”. With 917 illegal operators versus 95 legal ones, they control 74% of the market.
The report slams lax enforcement. Legalizing gambling without policing illegal operators hands criminals an edge, collapsing legal revenue and taxes.
Yield Sec’s surveillance shows 668 affiliates promote illegal sites versus 106 for legal ones. Federal taxes, like the 0.25% handle tax, burden legal operators, who pass costs to bettors, while illegals evade.
States like New Jersey, with a 5.6% problem gambling rate, invest just 0.0009 cents per gambling dollar in addiction programs. CFG calls for federal oversight and site blocking.
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