Illegal bets by Americans total over $500bn each year, according to a report issued by the American Gaming Association.
The prohibited activity, which is taking place on illegal and unregulated sportsbooks, casino websites and skill games, costs state governments around $13bn in lost tax revenues each year.
That figure is $2.4bn more than the $11.7bn legal operators generated in 2021.
AGA CEO Bill Miller said: “Illegal and unregulated gambling is a scourge on our society, taking advantage of vulnerable consumers, skirting regulatory obligations and robbing communities of critical tax revenue for infrastructure, education and more.
“We have always known that the illegal market is expansive, but this report illuminates just how pervasive it is.”
The report estimates that Americans wager $63.8bn with illegal bookmakers and offshore sites at a cost of $3.8bn in gaming revenue and $700m in state taxes.
The US market, meanwhile, is expected to generate around $100bn in legal sports bets this year.
