Despite the fact that Americans enjoy gambling, the decisions they make when choosing a bookmaker are costing the nation a great deal of ...
money. The American Gaming Association (AGA) reported that in 2021, Americans placed $511 billion in bets on unregulated and illegal sportsbooks, leading to a net loss of $13 billion in tax revenue for the country.This loss was notably higher than what legal operators generated
in the same year, with only $11.7 billion in revenue. Out of the $92 billion in
tribal and commercial revenue in 2021, illegal gambling made up a staggering
$44.2 billion. This serves as a huge blow to the gaming industry, and it is
clear that better bookmaker decisions are needed from Americans in order to
reduce this loss.
AGA President and CEO, Bill Miller has lashed out at illegal and
unregulated gambling, claiming it preys on vulnerable consumers. He also stated
that it violates established regulatory obligations and deprives the public of
vital tax revenue that could have facilitated essential services and amenities
such as education and infrastructure.
Sports Betting Trends in the United States
The American Gaming Association's research on illegal and
unregulated gambling aimed to quantify Americans' gambling habits and
contextualize them in terms of their economic impact.
According to the report, Americans bet approximately $63.8 billion
in 2021 with illegal bookmarkers and online platforms based overseas. The
wagering cost is estimated at $3.8 billion in gaming revenue and $700 million
in state taxes.
The statistics are unsurprising, given that nearly half of all
sports bettors in the country wagered with illegal sportsbook operators in
2021. Unaware of their illegality, unsuspecting consumers continually used
illegal platforms. The majority of them believed the sites were legal.
However, the statistics indicate a shift favoring a regulated
market, given that sports betting is now legal in 36 states and the District of
Columbia. Since Americans wagered about $100 billion with licensed and regulated Online
Gambling Sites in 2022, illegal bookmakers took about 40% of
the US sports betting market. The 40% share significantly improved over
previous years, when Americans wagered more than half of their money with
illegal operators. AGA thinks that if the government and regulators did their
part, this number could be much lower.
The iGaming viewpoint
Despite the legal complexities surrounding iGaming in the United
States, many Americans are still engaging in it on illegal platforms. According
to a report, these platforms persuade Americans to wager an estimated $337.9
billion annually, resulting in an estimated loss of $3.9 billion in potential
revenue for states. This is close to triple the size of the legal market, which
is projected to only earn $5 billion by 2022. The federal issue of online
gambling remains largely unresolved, which may be a factor in why so many
people are seeking out illegal gambling platforms. In 2021, 48% of Americans
played online slots on illegal platforms.
The Expansion of Skill Machines
The Association's report found that there are 580,000 unregulated
skill machines on the market in the United States. This figure is significant,
as it suggests that almost half of all gaming machines in the country are not
subject to licensing. Furthermore, these unregulated machines have a
significantly lower win rate than expected, recording a 7.165 rate over 12
months, rather than the expected 25%. This means that Americans are at risk of
losing a great deal of money when playing these skill machines.
The Call to Action
At a press conference, the President and CEO of the AGA urged a
more proactive approach to tackle illegal and unregulated gambling. He proposed
that legal operators, law enforcement, and policymakers join forces to put an
end to such activity. Miller noted that this would help protect customers and
provide a level playing field for legitimate businesses. Given the potential
risks of not regulating gambling, Miller advocated for a shift in strategy to
prevent individuals and families from facing severe consequences, such as
addiction and financial hardship. He added that eliminating illegal and
unregulated gambling would benefit the public by providing greater protection
and fairness to all.
Final Thoughts
The findings of the American Gaming Association's report are a
stark reminder of the costly nature of America's offshore gambling habits. The
report highlighted the illegal and unregulated nature of online gambling, as
well as the presence of unregulated skill machines. It is clear that better
bookmaker decisions are necessary in order to reduce the nation's losses. The
AGA's call to action encourages legal operators, law enforcement, and
policymakers to join forces to put an end to illegal and unregulated gambling.
Doing so would protect consumers, provide a level playing field for legitimate
businesses, and ensure that Americans are able to gamble safely and
responsibly.
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