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Online Gambling Crisis: A Closer Look at the Numbers

The landscape of online gambling in the United States is increasingly concerning, as a recent report from the Campaign for Fairer Gambling (CFG) underscores. According to their findings, illegal online gambling now accounts for an alarming 74% of the total gross gambling revenue in the country. This revelation comes as CFG releases its USA National Online Gambling Report 2024, revealing that the legalization of online gambling, without concurrently tackling the illegal sector, has significantly heightened consumer losses.

The Impact of Legalization on Gambling Losses

The CFG's analysis categorizes U.S. states into three distinct regulatory bodies regarding online gambling:

• - States with no legal online gambling (such as California and Texas)
• - States permitting limited online gambling, specifically sports betting (e.g., New York and Florida)
• - States with full legalization, allowing both sports betting and casino games (e.g., Michigan and New Jersey)

The report starkly showcases that legalization, without adequate enforcement to counter illegal operations, has further exacerbated the issue. As per capita gambling losses have surged, those living in states where only sports betting is legal face losses that amount to 148% of the average income. In states that have embraced both forms of legal gambling, this figure skyrockets to a staggering 261%. This worrisome trend suggests that instead of curbing illegal gambling, legalization efforts have unintentionally spurred even greater losses for consumers.

A Case Study in Ohio

One state drawing particular concern is Ohio, which legalized online sports betting in 2023. Just a year later, residents have experienced a shocking rate of loss, reaching 1.33% of their average income. This represents the heaviest burden on gambling losses across the nation. Derek Webb, the founder of CFG, emphasizes that contrary to expectations, legalizing online gambling has not replaced illegal gambling; rather it has compounded the financial strain on consumers. In states with full gambling legalization, the losses experienced have certainly become more profound. Webb states, "This isn't progress, it's escalation."

The Vicious Cycle of Illegal Gambling

Ismail Vali, the founder and CEO of Yield Sec, further analyzes the issue, pointing out an undeniable truth; legal online gambling is being significantly undermined by illegal gambling operations. These criminal enterprises are capable of offering more lucrative deals, including bigger bonuses and fewer restrictions, as they avoid the costs associated with taxes, licensing, and regulatory compliance. This unlawful competition creates an unfavorable environment for legally operating platforms, leading to a predictable decline in legal revenue and tax income, while criminal enterprises reap the rewards.

It is crucial to note that the current state of online gambling demonstrates a vicious cycle: the failure to adequately address illegal gambling results not just in financial losses but also in theft and other crimes associated with unregulated betting. If states desire to maximize their potential revenue, robust enforcement against illegal operations must be prioritized before further legalization of online gambling.

Conclusion

The CFG's findings highlight an urgent need for reform in the realm of online gambling regulation. While the push for legalization may stem from a desire to control and monetize the gambling market, the overwhelming prevalence of illegal operations indicates a battle not yet won. Without addressing the illegal aspect of gambling, state legislatures may find themselves caught in a cycle of increasing consumer losses and diminishing legal revenues. For Americans to benefit from legalized gambling, a strategic focus on enforcing laws against illegal gambling must be at the forefront of future initiatives.

To access the full USA National 2024 report and the CFG State Supplement #1 or for more inquiries, visit CFG's official site.

This scenario serves as a poignant reminder of the complexities involved in attempting to regulate and control a market that is intertwined with unauthorized and illicit operations. With over three decades of gambling reform advocacy, the CFG continues its mission to bring fairness to gambling practices across America.