• The US commercial gaming industry generated a record $19.44 billion in revenue in Q2 2025, a 9.8% year-on-year increase and its 18th consecutive quarter of growth.
• Growth was driven by the online sector, with iGaming revenue surging 32.2% to $2.60 billion and sports betting revenue jumping 20.6% to $3.92 billion.
• Despite this success, a new American Gaming Association (AGA) report estimates that the illegal market still captures 31.9% of all US gambling activity.
• This illegal market generates an estimated $53.9 billion in annual revenue, depriving state governments of $15.3 billion in taxes.
• The AGA has called for a “national crackdown,” highlighting the threat from offshore online operators and over 625,000 unregulated “skill” machines.

The United States’ legal commercial gaming industry has continued its remarkable growth streak, posting its highest-grossing second quarter on record. According to the latest data from the American Gaming Association (AGA), total commercial revenue for Q2 2025 reached $19.44 billion, a 9.8% increase year-on-year.

The result marks the sector’s 18th consecutive quarter of growth. The gains were broad-based but overwhelmingly driven by the online segments. While traditional land-based casino gaming saw a modest 2.8% increase, iGaming revenue surged by 32.2% to $2.60 billion, and sports betting revenue jumped 20.6% to $3.92 billion. The legal industry also contributed a record $4.59 billion in direct gaming taxes to state and local governments during the quarter.

…Haunted by a Persistent Shadow Market

However, this record-breaking performance is being significantly undermined by a vast and persistent illegal market. In a separate new analysis, the AGA has revealed the staggering scale of this shadow economy, estimating that unlicensed operators are capturing 31.9% of the total US gambling market.

According to the association’s research, these illegal operations are generating an estimated $53.9 billion in revenue annually, and in doing so, are depriving state governments of $15.3 billion in potential tax revenue each year.

“Illegal gambling operators are thriving at the expense of American consumers, siphoning billions in tax revenue from state governments, and undercutting the efforts of the legal market,” said AGA President and CEO Bill Miller.

The Drivers of the Illegal Economy

The AGA report identifies two primary drivers of this massive illegal market. The first is the proliferation of unregulated “skill” machines. The report estimates that over 625,000 of these devices are now operating in bars, restaurants, and convenience stores across the country, generating $30.3 billion in untaxed revenue.

The second is the booming offshore online casino market. Illegal online slots and table games now generate an estimated $18.6 billion in revenue, a figure that has surged by nearly 38% in just three years.

A Call for a ‘National Crackdown’

In response to these findings, the AGA has issued an urgent call to action. “ It’s time for a national crackdown on the pervasive illegal market that is draining state coffers and putting people at risk,” Miller stated.

He warned that these “bad actors operate in the shadows with zero consumer protections, no responsible gaming obligations, and no economic return to the communities they exploit.” The AGA’s new data provides the starkest evidence yet of the dual reality of the US market: a legal, regulated sector that is thriving, but a shadow economy that remains a larger and more pervasive threat than ever before.