Americans are gambling about $511 billion a year on illegal websites, robbing state governments of about $13.3 billion in tax a year, according to a report from the American Gaming Association (AGA).

It said that the illegal industry also costs the legal gaming sector $44.2 billion in annual revenue, which is almost half of the total revenue generated in 2021.

“Illegal and unregulated gambling is a scourge on our society, taking advantage of vulnerable consumers, skirting regulatory obligations and robbing communities of critical tax revenue for infrastructure, education and more,” said AGA President and CEO Bill Miller. “We have always known that the illegal and unregulated market is expansive, but this report illuminates just how pervasive it is.”

The AGA commissioned The Innovation Group to carry out the report, which was based on a survey of 5,284 adults. It asked about their past-year gambling habits in both legal and illegal operators.

Online slots/casinos get lion’s share of illegal wagers

The largest chunk of illegal bets went on illegal iGaming websites offering online slots and table games. A total of $337.9 billion was wagered. The illegal market in this segment is almost three times the size of the legal market, which is forecast to generate revenue of $5 billion this year.?

So far, only six states have legalised online casinos, meaning that almost half of Americans who accessed these sites played illegally.

?The AGA report found that Americans bet $63.8 billion on illegal bookies and offshore sports betting sites. The legal market is projected to be $100 billion this year, meaning illegal sportsbooks are capturing about 40 percent of the total U.S. market.?

Sports betting is now legal in the U.S. in 36 states and the District of Columbia and the AGA said that even though the figures are significant, they also indicate a move towards regulated markets.

The AGA said unregulated gaming machines are also expanding, with an estimated 580,651 machines, compared with 870,000 regulated machines in casinos. These illegal machines have a significantly higher win rate at about 25 percent, compared with 7.16 percent for Nevada’s casinos.?