A report conducted by YieldSec and commissioned by the Campaign for Fairer Gambling (CFG) suggests the illegal sports betting and online casino markets are far outpacing the legal betting market.

The report says 103 legal operators (both online casino and sports betting apps) target U.S. customers, while there are 860 illegal operators targeting U.S. customers. The report says those illegal operators generated $40.9 billion in gross gaming revenue in 2023 compared to $16.9 billion for legal operators.

“The black market is alive and well in America. Legalizing iGambling was never going to adequately weaken the illegals,” CFG founder Derek Webb said in a press release. “But the presence of the black market has served as a useful foil — the legal gambling sector’s main rationalization for expansion.”

CFG believes legal operators haven’t sufficiently moved customers away from illegal, offshore platforms.

“Substitution from illegals to legals is simply not happening at the pace it should – illegals are used as brands of choice and convenience, with some substitution to legals for offers and account opening incentives, when available, as with the Super Bowl,” the report concludes.

YieldSec looked at the 2024 Super Bowl to illustrate interest from consumers in using illegal betting platforms. The report says 228 million bets were placed on illegal platforms, compared to 122 million bets on legal sports betting apps.

“The range of sports and allied entertainment bets, such as with this year’s focus on Taylor Swift Special Bets (How many times will she appear on camera?, What color lipstick will she be wearing?), is catered to by illegal operators, who use their advantages across search and social media to overwhelm the relevance and authority of legal brands,” the report says. “Illegals are, quite simply, everywhere that the Super Bowl conversation is taking place online, and very close by with transactional opportunities for all Americans.”

The report even estimates the amount wagered on the 2024 Super Bowl via illegal operators was $500 million more than the amount wagered through illegal operators in 2023.

The exact methodology used in the report is vague, with YieldSec saying it used proprietary data to come to some of its estimates.

“Our analysis derives from data obtained from our online surveillance as well as from third party licensors,” the report says. “Our assessment of large complex online marketplaces is limited by the availability and completeness of data. We are confident, however, that our platform provides by far the best analysis of online marketplaces possible.”

The report also dives into the habits of affiliates, suggesting that 119 affiliates only promote legal betting apps, while more than 600 affiliates promote illegal betting apps and target U.S. customers. The report suggests that 84% of U.S.-facing affiliates promote illegal operators in some capacity.

CFG considers that a major issue.

“As frequently as the legal gambling sector invokes the black-market bogeyman, they have been curiously non-urgent in supporting measures that would actually combat it,” Webb said. “We hope the American Gaming Association joins us in calling for marketing affiliates engaged in the promotion of illegal gambling to be barred from operating in America.”