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A new industry study says the US illegal online gambling market generated $97.4 billion in gross gaming revenue in 2025, far outpacing the regulated online market’s $28.3 billion.
For California readers, the most notable state-level datapoint is that the report lists the state’s gambling loss ratio at 0.43%, attributed entirely to illegal online gambling activity. California has not legalized online sports betting or online casino gaming.
Report says unregulated market still dominates nationwide
The study, commissioned by the Campaign for Fairer Gambling and produced by Gaming Compliance International, estimates total US online gambling gross gaming revenue reached $125.6 billion in 2025, up from $90.1 billion in 2024.
According to the report, unregulated operators accounted for 77% of that total in 2025, up from 74% a year earlier. It says the illegal segment grew 45.2% year over year, from $67.1 billion to $97.4 billion, while the regulated market grew 23%, from $23 billion to $28.3 billion.
The analysis covers online sports betting, online casino gaming, poker, lottery and crypto gambling products. It excludes daily fantasy sports, sweepstakes casinos and social casinos.
CFG founder and funder Derek Webb argued that enforcement should come before further market expansion, saying, “Taking action against bad actors in the illicit sector is the solution and must be the priority for all stakeholders.”
What the California data point does and does not show
The report compares gambling losses as a share of personal income across states with different legal frameworks. It says states with both legal online sports betting and online casino gaming recorded an average loss ratio of 1.38% in 2025. States with legal online sports betting only averaged 0.99%, while states without either product averaged 0.44%.
California’s reported 0.43% ratio falls close to that last group average, but the study attributes it entirely to illegal gambling because the state has no regulated online sports betting or online casino market.
For comparison, the report says West Virginia posted a 1.57% loss ratio, with 0.87 percentage points attributed to unregulated gambling. It also says Louisiana had the highest gambling spend-to-income ratio and the highest ratio of unregulated gambling expenditure to income.
Why readers should treat the findings carefully
The report argues that legalization has not reduced the size of the illegal online gambling market and says policymakers should prioritize monitoring, policing and enforcement before expanding regulated offerings.
At the same time, the findings come from commissioned research rather than a regulator. GCI says its estimates are based on online surveillance, proprietary data and third-party licensed datasets, but the article does not detail the full methodology. It also notes that GCI’s crypto gambling revenue estimates have previously been disputed by blockchain analytics firm Tanzanite.
For California, the immediate takeaway is limited but relevant: the report suggests online gambling demand already exists in the state, but it is occurring outside a regulated market. What happens next will likely depend less on this single study and more on whether lawmakers and regulators pursue enforcement, legalization, or both. Readers should also keep in mind that any gambling activity carries risk.
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Source: As reported by sigma.world.
