Illegal gambling brings in $9.5 billion from New York, New Jersey and Minnesota, according to a new report

The Campaign for Fairer Gambling (CFG) has found that illegal gambling brings in $9.5 billion from New York, New Jersey and Minnesota.

The report by the CFG and the technical intelligence agency Yield Sec (YS) highlights the enormous amounts of money that gambling on the black market can generate.

The CFG report finds billions in illegal gambling revenue

The gambling black market is a major problem for lawmakers and regulators. The Gross Gambling Revenue (GGR) across America is $40 billion for illegal gambling practices.

The world of iGambling, or digital betting, was the market the CFG and YS report focused on. New Jersey has the longest running history of legal operation of the practice. New York is an online gambling-only state, and Minnesota has no legal iGaming.

These three states gave lawmakers a good look at the issues surrounding different levels of legal and historical online gambling practices.

Three major conditions were observed in the CFG report

In New Jersey, 22% of the total online marketplace GGR ($996 million) is funneled into illegal online sports betting and 16% ($719 million) into illegal online casino gaming.

New York allows most of its regulated GRR to flow back into the illegal gambling world. $9% of profits, or $3.4 billion, go back to online casino gaming, and 27% more goes to illegal online sports betting.

Minnesota is the most curious case, with staggering unlicensed gaming revenues of more than $2 billion. Of these ill-gotten gains, 38%, or $929 million, goes to illegal online sports betting, and 62%, a massive $1.5 billion, goes to illegal online casino gaming.

CFG founder Derek Webb said of the current rules to combat illegal gambling: “Sector-friendly legislation, regulation and tax rates have not achieved much. Despite vastly different legal regimes, these three states continue to harbor over 800 illegal operators who operate without regard to state law.

Sportsbooks like Fanatics and FanDuel are the biggest players in regulated gambling in states that allow legal gambling.

However, some states have no laws, such as Minnesota and, as we reported earlier this year, Missouri. The challenge of balancing legal and illegal regulations thus becomes an important battleground for legislators and regulators.

Ismail Vali, founder and CEO of Yield Sec, said of the joint report: “This data and analysis exposes a stark reality: illegal gambling companies are brazenly stealing money from state and federal treasuries and legitimate U.S. industry. It is time for the federal government to end this broad daylight theft.”

Image: Ideogram.

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