The U.S. gambling sector posted healthy growth figures of 9.8% in the second quarter of 2025. According to data published by the American Gaming Association (AGA), land-based casinos, sports betting operators, and regulated online gambling sites generated a combined revenue of $19.44 billion during the period. However, illegal gambling continues to pose a significant threat, with the government losing $15 billion in tax revenue to illicit operators.
Key Insights into the U.S. iGaming Revenue Growth
- The American Gaming Association reported continued growth across all gambling verticals in Q2 2025. The combined revenue from land-based casinos, iGaming operators, and sports betting platforms jumped 9.8% to $19.44 billion.
- This was the eighteenth consecutive quarterly growth year-on-year and the highest grossing Q2 on record. All states, except North Carolina, posted net profits, and the authorities collected $4.59 billion in taxes.
- Illegal market operations increased 22% since the AGA’s last survey in 2022. However, growth in the legal sector in recent years has restricted the unchecked proliferation of illegal gambling operations.
Commercial Gaming Revenue Tracker Shows Positive Annual Change
According to the American Gaming Association’s Commercial Gaming Revenue Tracker, the regulated market posted accelerated gambling revenue during Q2 2025, with consistent improvement across all verticals. The tracker provides state and federal-level financial performance insights into the country’s licensed gambling sector.
The combined revenue from land-based casinos, sports betting operators, and iGaming platforms increased 9.8% to $19.44 billion. This marks consistent year-on-year growth for the eighteenth consecutive quarter and the highest earning Q2 revenue on record. Total revenue in June alone jumped 12.8% over the previous year.
Land-based casinos recorded a 2.4% growth while iGaming and sports betting operators witnessed 31.1% and 39.5% growth figures, respectively, generating a combined revenue of $6.4 billion. Out of the 38 licensed gambling jurisdictions, all but one posted positive revenue figures in the second quarter.North Carolina was the sole commercial gaming jurisdiction with negative revenue in Q2. The state witnessed an 18.5% YoY slump due to weak performance in April, as compared to 2024.
Online and land-based gambling operators paid approximately $4.59 billion in taxes during the period, approximately 18.8% higher than the previous year. Revenue from land-based casinos increased by 2.8%, amounting to $12.83 billion. While casino slot machines generated $9.37 billion, table games contributed $2.53 billion.
The sports betting sector increased by $3.92 billion YoY as American punters wagered $36.05 billion, representing an 11.7% hike in June over April. Online gambling revenue remained strong during Q2 2025, generating $2.60 billion, a 32.2% YoY increase, compared to the second quarter of 2024.
Illegal Gambling Comprises One-Third of the U.S Gambling Market
A recent study by the AGA concluded that Americans wager approximately $673.6 billion annually with unregulated gambling operators. A huge amount is therefore diverted away from licensed operators and the government, which could otherwise have been used for public welfare, social services, and community development.
The study also found that illegal gambling operations grew 22% since the AGA’s previous survey in 2022. While the legal gambling sector grew exponentially in the same period, illicit operators occupy 31.9% of the market share.
The report noted that unlicensed gambling operators generate approximately $53.9 billion in annual revenue, robbing the federal government of $15.3 billion in taxes every year. Bill Miller, CEO and President of the American Gaming Association, highlighted the issue, urging the government to take immediate action:
Illegal gambling operators are thriving at the expense of American consumers, siphoning billions in tax revenue from state governments, and undercutting the efforts of the legal market. It’s time for a national crackdown on the pervasive illegal market that is draining state coffers and putting people at risk.
Unregulated skill machines pose a major threat to legal gambling. Approximately 625,000 units operate across bars, convenience stores, and restaurants across the nation. These machines generate $30.7 billion in revenue annually, bleeding the state coffers of $9.5 billion in lost tax revenue.
Revenue from illegal iGaming operations amounts to nearly $18.6 billion annually, a 38% increase since 2022. However, the share of gamers at licensed online casinos dropped 52% in the same period. Despite this growth, illegal casinos occupy a smaller share of the U.S. gambling market than in 2022.
The report also finds that American punters wagered approximately $84 billion at unlicensed sportsbooks in the previous year. This market is worth $5 billion, costing the government $1 billion in lost tax revenue. Between 2022 and 2025, the share of sports betting exclusively using unlicensed operators fell from 36% to 24%. Commenting on the figures, Miller noted:
These bad actors operate in the shadows with zero consumer protections, no responsible gaming obligations, and no economic return to the communities they exploit. Combating them requires not only stronger U.S. enforcement, but also continuing to work closely with our international partners to shut down offshore operators and hold them accountable.