New York loses $5.35B to illegal gambling in 2023

New York, currently one of the leaders in legal sports betting in the United States, experienced a $5.35 billion loss of income in 2023 due to illicit gambling activities. This staggering sum was revealed in a report by Yield Sec for the Campaign for Fairer Gambling, which is a continuous threat posed by unlicensed sportsbooks and internet casinos.

Consequently, New York has been leading in the state tax revenue collection from legal sports betting, recording over $2 billion. However, there is a major problem of illegal gambling, especially through the use of the internet, and this is a threat since it could lead to the loss of a lot of money from the state. 

This was also evident in other states, including New Jersey and Minnesota, whereby their total combined loss to GGR as a result of black market activities exceeded $9.5 billion. The analysis differentiated between the legal and the illicit funds. It highlighted that although New Jersey had the largest share of GGR, New York was the worst off, with 76% of the funds coming from the illicit sector.

The study stressed the need for enhanced federal legislation to curb the operations of offshore gambling sites since they continue to attract customers despite the availability of legal options. New York has no legalized online casinos, and this has contributed to the worsening of the decline since attempts to pass the legislation that would allow this in 2023 failed. With online casinos being made legal, there is a possibility of getting an additional $3.45 billion in gross gaming revenue (GGR).

Some of the scholars have opined that increased and tougher policies and measures at the federal level may be necessary to prevent and reduce cases of illegality in gambling. At present, the state gets 51% GGR from taxes on sports betting. The report suggests that if online casinos were legalized and regulated, it could greatly boost state revenue, and New York’s $4.3 billion budget shortfall could be reduced by nearly half.

The revelation that emerges from this detailed analysis can, therefore, serve as a wake-up call for reform of the gambling sector, calling for both consolidations of consumers’ protection measures as well as optimization of state revenues from properly regulated gambling platforms.