In 2022, the United States commercial gaming market reached new records in revenue. With $60.4 billion generated across the country, it easily passed 2021’s previous record of $53 billion.
Yet, more than half a trillion dollars was still gambled illegally in the country last year.
A continued emphasis here in Michigan, the American Gaming Association wants 2023 to see a major dent in illegal gambling.
How much was bet illegally in 2022?
According to the AGA, $510 billion was illegally wagered in the United States in 2022.
Illegal gambling can include unregulated or unlicensed machines, illegal bookies or offshore gambling and sports betting sites.
The $510 billion in illegal gambling accounts for roughly $44.2 billion in lost gaming revenue and $13.3 billion in lost tax revenue.
“I don’t think there’s any other industry in America that would tolerate a half a trillion-dollar illegal marketplace, competing with the legal industry,” said AGA CEO and President Bill Miller. “The illegal market is the single biggest threat our industry faces.”
Michigan illegal gambling crackdown highlights from 2022
The Michigan Gaming Control Board put an emphasis on the crackdown of illegal gambling in 2022.
Along with the Michigan Liquor Control Commission and state law enforcement, the MGCB investigations led to confiscation of 373 illegal gaming machines. It also led to 17 individuals receiving criminal convictions in the last year.
“We plan to continue to address illegal gambling in Michigan in cooperation with the Michigan Department of Attorney General and other law enforcement agencies across the state,” MGCB Executive Director Henry Williams told Michigan Gaming this month.
Earlier this month, a former Flint police chief pleaded no contest to charges related to illegal gambling from 2018.
Why illegal gambling impacts you?
Illegal gambling is a concern for consumers in Michigan for a variety of reasons.
For individuals, the illegal “skill machines” you may find at bars or party stores around the state are not regulated. The operator win percentages are often higher than legal casino slot machines.
The operators also aren’t held to the laws of the state and the MGCB. Because it is an unregulated machine, consumers don’t have a way to resolves disputes through the aid of governing bodies within Michigan.
The MGCB offers a fact sheet that helps consumers identify unregulated gaming machines.
“We are concerned about the proliferation of non-regulated gaming machines in bars, restaurants and party stores. The unregulated machines do not offer consumers the protections of legal, regulated gaming, and they also have no controls to prevent underage gambling,” Williams said.
On a larger scale, illegal gambling also impacts the tax revenue for the state. Unregulated and unlicensed gambling operators don’t return any revenue to the state.
In 2022, through retail and online gambling Michigan generated over $679 million in tax revenue for state and local entities.
That tax revenue helps schools, first responders and other funds throughout the state.
The MGCB encourages Michigan citizens to report suspicious or illegal gambling activity. You can do so by calling its 24-hour anonymous tip line at (888) 314-2682.
AGA working with legislators
On the national level, the AGA is trying to step up its game to stop illegal gambling.
“We’re continuing that war against the illegal and unregulated gambling world. We’re using every tool at our disposal to go after illegal businesses,” Miller said. “We won’t see these results overnight, but we’re in this one for the long haul.”
The AGA is working with Congress to ensure law enforcement prioritizes investigations and prosecutions of illegal gambling.
The AGA is also engaging with state attorney generals on how these “bad actors” are able to flout the laws.
“But unregulated and illegal businesses are taking advantage of our growth and millions of consumers who are new to gaming. They’re brazenly ignoring the law exploiting consumer confusion by trying to present themselves as legitimate operators,” Miller said. “We’re just not going to stand for it. We’re weighing in with state legislatures to strengthen laws and close loopholes. And we’re working with private sector stakeholders to shut off platforms for illegal gambling operations.”
As Miller also noted, the U.S. legal gambling industry has been built in just the last five years. The illegal gambling market has been around for decades. It’s a long battle, but one that the AGA and the MGCB are committed to winning.