Illegal Gambling GGR in the US Surpasses Legal Market

Illegal US Gambling Revenue Surges Ahead of Legal Market, Yield Sec Report Reveals Alarming Trends

A recent Yield Sec report reveals a stark reality for the US gambling market: illegal gambling revenue continues to significantly outpace legal market gains. With an estimated $29.1 billion in illegal gross gaming revenue (GGR) generated in just the first half of 2024, the report highlights the immense challenges facing the legal gambling sector. Explore how this imbalance threatens the industry’s growth and what steps could be taken to redirect revenue back into the legal market.

Yield Sec’s Report: A Sobering Snapshot of US Gambling

According to Yield Sec’s latest analysis, the US gambling market reached an astounding $39.9 billion in GGR in the first six months of 2024. However, what is alarming is that $29.1 billion of this total was attributed to illegal gambling platforms, dwarfing the $10.8 billion generated legally. Yield Sec’s report, which focuses exclusively on sports betting and online gambling, underscores the persistent dominance of the black market despite the rapid expansion of legal wagering in the US.

Yield Sec’s findings are based on predictive analytics and data aggregation techniques that provide a comprehensive look at both legal and illegal markets. The report identified 892 illegal operators active in the US during the first half of 2024, supported by 651 affiliates promoting these unlicensed platforms. This network of unauthorized operations presents a formidable challenge to regulators and legal operators alike.

Legal Market Growth Stifled by Black Market Expansion

While the legal gambling market has shown steady growth, it is consistently overshadowed by the more lucrative illegal sector. Yield Sec’s historical data shows that the illegal gambling market accounted for $42 billion in GGR in 2022, $40.9 billion in 2023, and $29.1 billion in just the first half of 2024. If this trend continues, the illegal market could exceed $60 billion by the end of 2024, setting a record high.

The legal market, although expanding, lags far behind. Yield Sec reported $12.3 billion in legal GGR in 2022, rising to $16.9 billion in 2023. For the first half of 2024, legal operators generated $10.8 billion, and projections suggest the year could end with around $20 billion in legal GGR. Despite these gains, the stark contrast with the illegal market growth highlights the need for more aggressive measures to curb unauthorized gambling.

Yield Sec’s Call to Action: Redirecting Revenue to Legal Channels

Yield Sec CEO Ismail Vail emphasized the urgency of tackling illegal gambling, stating, “Legal operators are under serious pressure. The focus needs to be on the $29.1 billion lost to illegal gambling in the first half of 2024 alone.” Vail’s comments underscore the significant financial impact that illegal operators have on the broader industry, siphoning off revenue that could otherwise support licensed operators, generate tax income, and fulfill commitments to fair, safe, and responsible gambling.

Yield Sec’s reports consistently reveal that, while the legal market makes incremental progress, the illegal market remains a dominant force, benefiting from a lack of regulation, lower costs, and wider accessibility. Vail points out that the solution is not complex: “We’ve identified precisely where this loss of revenue is being realized. We just need to redirect it back into the pockets of legal operators.”

The Role of Seasonal Events and the Path Forward

The second half of 2024 is expected to be crucial for both markets, driven by high-stakes events such as the college football season and the NFL season, which began on September 5. These four months are traditionally responsible for around 35% of the total handle for US operators, suggesting that both legal and illegal markets will see substantial growth.

Yield Sec’s projections suggest that wagering GGR could more than double for both sectors by the end of the year. The company’s use of AI and machine learning to predict market scenarios has proven highly accurate, as demonstrated by their GGR predictions for the 2024 Super Bowl, which were within 3% accuracy of actual figures. This capability lends credibility to their alarming forecast for illegal market expansion.

The findings of Yield Sec’s report paint a troubling picture for the US gambling industry, with illegal gambling GGR far outpacing legal revenue. Despite the legal market’s growth, it is clear that significant challenges remain, particularly in redirecting bettors from illegal to licensed platforms. With billions of dollars at stake, industry stakeholders must prioritize combating illegal operations to safeguard the future of regulated gambling. As the industry heads into the most lucrative part of the year, the focus must be on driving change that redirects revenue to the legal market, ensuring a fair, safe, and sustainable gambling environment for all.