Illegal Offshore Online Casino Gambling Still Rages

The latest report regarding offshore online casino gambling should serve as a red flag to states that refuse to pass iGaming legislation. Billions of dollars of potential tax revenue is being pushed out the door in the direction of foreign iGaming operators that are more than happy to take from American online casino gambling enthusiasts.

According to a report released by the Campaign for Fairer Gambling (CFG), offshore and unregulated operators worldwide claimed an astonishing 74% of all gross gambling revenue (GGR) generated by online casinos. The report, supported by data from the market intelligence firm Yield Sec, states that total U.S.-driven iGaming GGR amounted to $90.1 billion in 2024. The divide was $23.0 billion generated by legalized and licensed U.S. iGaming operations, while $67.1 billion went to offshore, illegal operators.

For a little perspective, let's assume that all states employed an applicable average tax rate of only 25% of GGR. For what it's worth, that's on the low side, as states like New Jersey and Pennsylvania are charging operators a tax rate closer to 40%. At 25% times $67.1 billion, the potential for $16.8 billion in usable tax revenue is out there for the taking.

The question that has to be on any reasonable person's mind is this: "How much longer can state legislatures justify not legalizing iGaming access when many state coffers are running dry?"

It would seem that honoring the exclusive rights of U.S. Indian Tribes to control all casino gambling in their respective states is now coming at a huge cost to residents in each state where online casino gambling is not yet legal. One would think it's time to get everyone to the table to discuss equitable solutions instead of allowing offshore casinos to reap the benefits of U.S. patronage.

A Dig Into the Numbers

In its analysis, Yield Sec did a study of iGaming activities across all 50 states. What they found was that the year-over-year growth rate related to said activities was both amazing and astonishing. In 2024, regulated online casino gambling GGR rose by 26%. Not bad. Not to be outdone, unregulated iGaming GGR rose by 64%. How could this be happening?

According to the report, 917 illegal iGaming platforms got action from U.S. residents during the year. Only 95 U.S.-licensed platforms reported revenue from residents in their respective states. That puts the U.S. iGaming industry at a disadvantage of almost 10 to 1.

A look at California and New York tells an important story. Neither state has legalized iGaming access. Therefore, all $10.8 billion gambled in those states in aggregate went to offshore operations. Does anyone think these two states can't use an influx of tax revenue?

Here is an even more alarming fact. Seven (7) states currently license online gambling operators. This list includes Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, Rhode Island, and West Virginia. In these states, 42% of iGaming GGR went to offshore operations. Why?

The answer is twofold: better enforcement of laws directed at offshore operators is a must, and legislators need to start acting for the benefit of the home team and start passing iGaming legisltion.