Summary
- A recent report from the Campaign for Fairer Gambling examines the effects of legalized gambling throughout the United States.
- Legalizing online gambling without adequate safeguards can allow criminals to take advantage of the system by running unlicensed operations and evading taxes and regulations.
- In states where gambling is legal, the online gross gaming revenue as a percentage of average income has increased.
The Campaign for Fairer Gambling (CFG), known for its independent and pragmatic approach to gambling policy, has released a new report analyzing the effects of legal online betting and casino gambling. This latest document, titled CFG State Supplement #1, complements the CFG's USA National Online Gambling Report 2024, focusing specifically on consumer engagement in both legal and illegal gambling sectors.
Criminal competitors undermine the legal gambling sector
The report highlighted a significant concern: when states legalize online casinos and betting without addressing illegal gambling, there is a noticeable increase in financial losses due to illicit activities. All 50 US states are divided into three categories. The first includes states like Texas and California, where no online gambling is permitted. The second category encompasses states such as Florida, where only certain forms of online gambling, like sports betting, are allowed. The third category includes states like New Jersey and Michigan, where all types of gambling, including betting and casinos, are fully legal. Ismail Vali, founder and CEO of Yield Sec, discussed the latest findings, emphasizing how the legitimate gambling industry is constantly thwarted by criminal competitors. These illegal operators attract players with larger bonuses and greater value since they evade taxes, licensing fees, and other regulations. Vali described it as a vicious cycle: neglecting to combat crime leads to losses from theft. When legalization occurs without crackdowns on illegal operators, it inadvertently gives criminals an advantage. He further explained that the surge in illegal gambling predictably results in reduced tax revenues and legal earnings, with hundreds of millions of illicit funds staying with criminals. Vali concluded by stating, If states wish to achieve their financial goals, rigorous enforcement against crime must be the priority, to diminish and eliminate the lure and availability of illegal gambling.
Legalizing gambling affects consumer losses
The recently published report by Yield Sec, a leading online market intelligence platform, has found that the country's gross gaming revenue (GGR) per capita accounts for 0.62% of the average income. The report analyzed GGR per capita in relation to three distinct state categories. According to CFG's findings, states without legal online betting or casino gambling reported a GGR per capita of 0.31% of average income. In contrast, states with legal online betting alone showed a GGR per capita of 0.77% of average income. More concerningly, states with both legal betting and iGaming activities exhibited a GGR per capita of 1.12% of average income. The CFG State Supplement #1 report highlights: When states legalize online sports betting only, the GGR per capita as a percentage of income increases by 148% (from 0.31% to 0.77%). When both online sports betting and casinos are legalized, this figure surges by 261% (from 0.31% to 1.12%). Derek Webb, Founder of CFG, expressed concern that illegal gambling persists nationwide, while consumer losses are increasing. In states with full legalization, consumer losses are now 261% higher than in areas without any legal online gambling. This is not progress; it's escalation, he stated. Lastly, Webb highlighted the situation in Ohio, noting that a year after legalizing online sports betting, the state reported a GGR per capita of 1.33% of average income, more than double the national average.
