The US online gambling market continued to grow in 2025, but a new report claims most of that activity still took place outside state regulated systems.
Gaming Compliance International estimates that unregulated online gambling generated $97.4 billion in gross gaming revenue from US players in 2025, according to its 2025 US gambling market report. That would represent roughly 77% of the total online gambling market and a 45.2% increase from the year before.
Regulated online gambling grew as well, but at a slower rate. GCI estimates regulated revenue increased from $23 billion in 2024 to $28.3 billion in 2025. Combined, the report puts the total US online gambling market at about $125.6 billion.
The exact size of the offshore market is difficult to measure, so the $97.4 billion figure should be treated as an estimate rather than a reported revenue total. Still, the broader takeaway is important.
Legalization has expanded regulated gambling across the United States, particularly sports betting, but it has not eliminated offshore demand.
The Unregulated Market Is Growing Faster
The most interesting part of the report is not simply the size of the offshore market.
It is the growth rate.
GCI estimates unregulated online gambling increased from $67.1 billion in 2024 to $97.4 billion in 2025. That works out to growth of more than 45% in one year.
Regulated gambling grew by about 23% during the same period.
That means the regulated share of the total online market actually declined. GCI estimates regulated operators accounted for around 26% of the market in 2024 and 23% in 2025.
That is not the direction regulators would want to see.
One of the main arguments for legal online gambling has always been that players are already using offshore sites, so states might as well give them a regulated alternative. The expectation is that players gradually move toward licensed operators that pay taxes and follow local rules.
The new estimates suggest that process is far from complete.
The regulated market is growing, but the offshore market appears to be growing alongside it.
What the Report Means by Unregulated Gambling
The definition matters.
GCI uses the term unregulated to describe operators that accept players from a state or jurisdiction without holding the local license required there.
That can include an offshore casino that is licensed somewhere outside the United States.
In other words, unregulated does not necessarily mean completely unlicensed.
An offshore casino may hold a recognized international license, operate legally under that jurisdiction, and still be considered unregulated from the perspective of a US state because it does not hold a local state license.
The report includes online casinos, sports betting, poker, online lottery products, crypto gambling and prediction markets.
It does not include every form of gaming activity.
Sweepstakes casinos, social casinos, daily fantasy sports, prize draw sites and retail gambling are outside the scope of the estimate.
That is worth keeping in mind when looking at the overall $125.6 billion figure.
The $97.4 Billion Figure Is Still an Estimate
State licensed sportsbooks and casinos report their revenue directly to regulators.
Offshore operators do not.
There is no public database showing exactly how much money US players lose at offshore casinos or sportsbooks each year.
That means any attempt to measure the market requires modeling.
GCI says its system uses online traffic, player behavior, promotional offers, payment information, pricing and other digital data to estimate how much gambling activity is taking place.
That makes the report useful for understanding the possible scale of the market, but it is not the same thing as a regulator publishing audited revenue from DraftKings, FanDuel, BetMGM or another licensed operator.
The exact number can be debated.
The existence of a large offshore market is much harder to debate.
Other Estimates Are Much Lower
The size of that market depends heavily on who is measuring it and how.
The American Gaming Association released its own estimate in 2025 and arrived at a much smaller number for unregulated online gambling.
The AGA estimated that unregulated iGaming generated around $18.6 billion in annual revenue, while illegal sports betting produced another $5 billion. Its broader $53.9 billion estimate included unregulated physical gaming machines as well.
That is nowhere close to GCI’s $97.4 billion estimate.
The difference does not necessarily mean one report is right and the other is wrong. They are using different methodologies and measuring somewhat different parts of the market.
The gap does show how difficult it is to put an exact number on offshore gambling.
Players do not report offshore wagers to regulators, and offshore operators generally do not publish US state by state revenue.
There is no perfect dataset.
What the major studies continue to agree on is that unregulated gambling remains a significant part of the US market.
Legal Sports Betting Has Not Replaced Offshore Betting
Sports betting is the clearest example.
Legal mobile sportsbooks are now available across most of the United States. Players in many states can open DraftKings, FanDuel, BetMGM, Caesars or another regulated app from their phone and place a wager.
Offshore sportsbooks still have customers.
That should not be surprising.
Some players have used the same offshore sportsbook for years. Others prefer crypto payments, higher betting limits or markets that may not be available at state licensed operators.
There are also differences in promotions, account restrictions and the types of wagers offered.
Legalization gave players another option.
It did not automatically give them a reason to stop using every offshore site.
That distinction matters when lawmakers argue that regulated sports betting will simply move existing gambling activity into a legal market.
Some of that migration clearly happens.
Some does not.
Online Casinos Create an Even Bigger Gap
The difference is even more obvious with online casinos.
Sports betting is legal in most states.
Online casino gambling is not.
Only a relatively small number of states currently allow regulated real money online casino games.
That means a player living outside those states may have no locally licensed option for online slots, blackjack, roulette or live dealer games.
Offshore casinos fill that gap.
They may offer hundreds or thousands of games, crypto deposits, large bonuses and casino and sportsbook products under one account.
For players who already want to gamble online, the absence of a state regulated casino does not necessarily stop them from doing it.
It can simply determine which type of site they use.
That is one reason the offshore casino market has remained so difficult for regulators to reduce.
Some Regulated States Still Show Heavy Offshore Activity
One of the more interesting findings in the GCI report is that offshore gambling did not disappear in states with regulated online gambling.
States with legal online casinos and sportsbooks still showed significant estimated unregulated activity.
That suggests some players use both.
A customer may use a regulated sportsbook for NFL betting while also playing casino games at an offshore site. Another player may have accounts with several regulated sportsbooks but keep an offshore account because it offers higher limits or different markets.
That does not make the two markets identical.
State licensed operators are subject to local gaming regulations, while offshore sites operate under different licensing systems.
From a consumer behavior standpoint, though, the distinction is not always enough to push every player toward one market.
Louisiana Stood Out in the Report
Louisiana ranked highest in GCI’s comparison of online gambling activity relative to income.
The state does not have regulated online casinos, although mobile sports betting is legal.
Most of the estimated activity identified by GCI therefore came from outside the state’s locally regulated market.
Michigan and New Jersey also ranked near the top despite having both legal online casinos and sportsbooks.
That is interesting because those states already offer many of the products offshore sites provide.
Players can legally access online slots, table games, live dealer casinos and sportsbooks without leaving the regulated market.
Offshore gambling still exists alongside them.
That is another reminder that availability alone does not determine where every player chooses to gamble.
Why Players Still Use Offshore Casinos
There is no single explanation.
Availability is the most obvious one.
If a state does not offer regulated online casino gambling, offshore sites may be the only real money casino option available online.
Payments matter too.
Offshore casinos have generally adopted cryptocurrency faster than US regulated operators. Players can often deposit and withdraw using Bitcoin, Litecoin, USDT and other digital assets.
Bonuses can also be larger.
Offshore casinos frequently use aggressive deposit matches, reload bonuses, free spins, cashback and loyalty offers to compete for players.
Some players also prefer having sports betting and casino games under one account.
None of those features guarantee that one site is better than another, but they explain why offshore operators continue attracting customers even as regulated gambling expands.
Regulated Operators Still Have Their Own Advantages
State licensed casinos and sportsbooks have a different selling point.
They operate under local regulation.
That gives players access to state complaint procedures, required responsible gambling tools and clearly defined operating standards.
Payments, verification and promotional rules are also subject to state oversight.
For many players, that level of regulation is more important than a bigger bonus or wider selection of payment methods.
The US market has therefore developed into two different systems serving many of the same customers.
One focuses more heavily on local regulation.
The other often competes through availability, flexibility and product selection.
The new report suggests both are continuing to grow.
The Report Is Already Being Used in the Legalization Debate
The Campaign for Fairer Gambling commissioned the research and has used the results to argue that states should be cautious about expanding online gambling.
Its position is that legalization can increase total gambling activity without eliminating the offshore market.
Supporters of regulated online casinos can look at the same numbers and reach the opposite conclusion.
If Americans are already gambling at offshore casinos, they can argue that states should create regulated alternatives and move more of that activity into locally licensed markets.
That debate has become one of the biggest questions surrounding US iGaming.
Does legalizing online casinos replace offshore gambling?
Does it simply add another option?
Or does it expand the total market while offshore sites continue operating in the background?
The answer is probably some combination of all three depending on the state.
Offshore Gambling Is Not Going Away Anytime Soon
US gambling has changed dramatically since the Supreme Court opened the door to widespread state regulated sports betting in 2018.
The regulated market is now worth billions of dollars every year.
Sportsbooks are available across most of the country, and legal online casinos have become major revenue producers in states such as New Jersey, Pennsylvania and Michigan.
Offshore gambling has survived that expansion.
Exactly how large that market is remains difficult to determine. GCI’s $97.4 billion estimate is far higher than other industry research, and there is no way to independently verify every dollar generated by offshore operators.
The specific number should therefore be treated carefully.
The larger trend is more important.
Americans are continuing to use offshore casinos and sportsbooks even as more regulated alternatives become available.
That creates a difficult problem for both lawmakers and the gambling industry.
States can increase enforcement. They can expand regulated casino gambling. They can restrict payment processors or pressure operators through legal action.
None of those approaches guarantee that offshore gambling disappears.
The US has spent most of the last decade building a regulated online gambling market.
The next challenge may be figuring out why so much activity still happens outside of it.
Last Updated: 10 hours ago
