US Gambling Market Is Losing Revenue to Unregulated Online Casinos

US Gambling Market Is Losing Revenue to Unregulated Online Casinos

Some decades ago, the US Federal Government banned gambling. At that time, there were no online casinos. The government of that time could not have envisioned a time when online casinos would become the norm. Due to this, the law remained silent about online casinos.

Legalization of online casinos at the state level

Not long ago, the state governments began legalizing online gambling. This was after the Supreme Court paved the way for regulated USA online casinos. Although the states created and passed online gambling laws, the law was still silent at the Federal Government level.

Investors would establish online casinos in states that hadn’t declared online gambling illegal. That meant the online casinos would operate without any laws regulating them. Even though online gambling is widely legalized by most states, some don’t declare the existing unregulated online casinos illegal.

A state like New Jersey legalized online gambling and banned unlicensed operators. Other states banned unlicensed casinos but remained silent about online casinos. This is where the current problems began.

The problems with unregulated online casinos

A large part of the US population is still gambling through unregulated online casinos. They gamble both within the states and offshore online casinos. It is worth noting that both the federal and state governments have less control over unregulated online casinos. This is because most of them are located in other countries.

In a state where unlicensed online gambling has been declared illegal, the government can easily track down illegal gambling and take action. However, if the state government has remained silent and passed no laws, it is not easy for them to take action.

This problem brings rise to another problem. The unregulated sector becomes a ground for scams and identity theft. They use false advertising, which often makes people develop gambling addiction which is already a problem in the USA.

Many gamblers lose their money. Sometimes they get a win, but the money is never sent to them. Other gamblers’ information is shared with third parties. In 2020, the US recorded over 1.3 million identity theft cases involving unregulated online gambling.

How unregulated online gambling is affecting the regulated online gambling

The regulated online gambling sector pays taxes to the state governments. The government uses the revenue to fund other projects. When people gamble in unregulated online casinos, they deny the government a chance to raise money for funding projects.

The regulated online casinos get less revenue

The US online casino industry has been recording growth for the last three years. The sports betting sector has created different products for gamblers who love watching sports.

Unfortunately, a large chunk of revenue is taken by unregulated casinos. Sometimes gamblers are unable to differentiate between a regulated and nonregulated online casino. To them, online casinos are the same.

If all revenue earned from online gambling was channeled through the regulated industry, the licensed casinos in the US would double the revenue they are recording today. The best solution to the problem is to establish laws that ban unregulated online gambling both within the states and offshore.

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