• A new report by the Campaign for Fairer Gambling focuses on the impact of gambling legalization across the United States
• Legalizing iGaming or online betting without proper safeguards against illegal gambling enables criminals to exploit the sector by operating without a license and avoiding taxes or regulations
• Online gross gaming revenue per capita of average income increases in states where gambling is legal

The independent, pragmatic voice on gambling policy, the Campaign for Fairer Gambling (CFG), released a new report analyzing the impact of legal online betting and casino gambling.

The new white paper, CFG State Supplement #1, comes in addition to the CFG's USA National Online Gambling Report 2024 and it focuses on consumer engagement within the legal and illegal gambling verticals.

Criminal competitors undermine the legal gambling sector

Notably, the report warned that a significant increase in losses to illegal gambling is observed in cases where states have legalized online casinos and betting but have not removed or reduced illegal gambling.

There are three separate categories under which all 50 US states have been classified, with the first one including states that do not offer any online gambling activities, such as Texas and California.

The second category includes states like Florida or New Jersey, where one form of online gambling, such as sports betting, is available, while the third category relates to states like New Jersey and Michigan, where all forms of gambling, including betting and casino, are legal.

Ismail Vali, Yield Sec's founder and CEO, spoke about the latest report, revealing that the legal gambling sector is constantly undermined by "criminal competitors."

Such illegal gambling operators offer bigger bonuses and "greater value," considering that they do not pay taxes, are not accountable to licensing fees or other rules.

"It is a vicious cycle: failing to deal with crime causes loss from theft. Across the country, legalization without enforcement against illegal operators, only gives criminals another edge," Vali explained.

He added that the growth of illegal gambling has a predictable outcome, which includes decreases in tax revenue, declines in legal revenue and hundreds of millions of ill-gained funds remaining in the hands of criminals.

Finally, Vali said: "If states want to make the money they should, enforcement against crime must come first and always - to reduce and remove illegal gambling's appeal and availability."

Legalizing gambling affects consumer losses

The newly released report, produced by the leading online market intelligence platform, Yield Sec, calculated that the total online gross gaming revenue (GGR) per capita for the country is 0.62% of average income.

The report compared the GGR per capita average result to the three different state categories.

Interestingly, according to CFG's report, the states with no legal online betting or casino gambling reported GGR per capita of 0.31% of average income, whereas states with legal online betting only reported 0.77% GGR per capita of average income.

Concerningly, the GGR per capita of average income reported in states with both legal betting and iGaming was 1.12%.

The CFG State Supplement #1 report explains: "When states legalize online sports betting only, GGR per capita as a percentage of income increases by 148% (from 0.31% to 0.77%). When both online sports betting and casino are legalized, it jumps by 261% (from 0.31% to 1.12%)."

Derek Webb, CFG's Founder, sounded the alarm, saying that across the country, illegal gambling isn't being replaced and at the same time, the total consumer losses continue to grow.

"In states with full legalization, losses are now 261% higher than where there's no legal online gambling at all. This isn't progress, it's escalation," he explained.

Last but not least, Webb spoke about Ohio, warning that one year after the legalization of online sports betting, the state recorded GGR of 1.33% of average income per capita, a result that was more than twice the national average.

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