The Michigan Gaming Control Board is Attempting to Stop Illegal Gambling, But the Issue is Going National
Even if there are more legalized forms of gaming than ever, there are still problems with illicit gambling.
According to a poll conducted by the American Gaming Association and released last week, Americans gamble illegally every year for $511 billion.
Because of various forms of gambling, including those conducted through unlicensed sportsbooks, iGaming platforms, and illicit machines, governments lose more than $13 billion in tax revenue.
By 2022, MGCB wants to outlaw unlawful gambling, particularly regarding unlicensed equipment.
The AGA Research Findings about Illicit Gambling
The AGA’s latest report estimates that $510.9 billion is wagered with illegal and unregulated operators annually in its most recent report, Sizing the Illegal and Unregulated Gaming Markets in the U.S.
The AGA considers this has cost the legal gaming sector $44.2 billion in lost revenue nationwide. Additionally, $13.3 billion in unrealized tax income is being lost.
The AGA's classifications for unregulated markets are sports betting, unregulated machines, online slots, and table games.
You can see how much each category contributes to the $510.9 billion total in the table below.
US Illegal and Unregulated Markets
Unregulated Market | Handle | Revenue (Estimated) | State Tax Loss (Estimated) |
Slots & Table Games | $337.9 B | $13.5 B | $3.9 B |
Sports Betting | $63.8 B | $3.8 B | $700 M |
Unregulated Machines | $109.2 B | $26.9 B | $8.7 B |
Total | $510.9 B | $44.2 B | $13.3 B |
* Date taken from American Gaming Association
Which Types of Gambling are Prohibited?
It is deemed illegal to gamble at sportsbooks or casinos in the US that are not controlled by a government body. It applies to shady bookmakers or foreign websites.
Unlicensed machines, sometimes called "skill machines," have no oversight whatsoever. The operator win percentage is often much more significant when compared to actual casino slot machines.
In any event, uncontrolled businesses are exempt from the state's rules. They don't pay any taxes either.
Additionally, it implies that users who use unlawful gambling machines have no legal recourse against their distributors and operators.
The MGCB Is Hunting Down Unauthorized Machines
The MGCB has increased its attempts to eliminate illegal gambling machines in 2022.
According to the MGCB, communities that use these unlawful devices are more likely to engage in significant criminal activity. The MGCB has created a consumer identification fact sheet for illicit gadgets.
“Unlawful gambling machines”, in the words of Henry Williams, executive director of the MGCB, "bring undesired crime to communities across Michigan and deprive school districts of gaming tax money from the state to support education. The MGCB strives to raise awareness of illicit gambling among the general public and companies. It supports state and municipal officials in their attempts to get gambling machines out of operation.”
According to the AGA, there are now 580,651 unregulated devices in the United States. 40% of all gaming machines in the nation are illegal, even though there are 870,000 certified devices in use.
350 unlawful machines have been seized with the help of the MGCB and local law enforcement over the past year. 17 people have been found guilty of criminal offenses as a consequence of state investigations into the usage of illicit gaming machines. According to Mary Kay Bean, communications specialist for the Michigan Gaming Control Board:
“Last year, the MGCB initiated a statewide public outreach and enforcement drive to urge venues to remove unregulated equipment used for unlawful gambling. The MGCB considers steps to limit the use of gaming machines for illicit purposes to be essential to achieving its objective of offering Michigan residents fair and honest gaming.”
The MGCB urges residents of Michigan to report any shady or illegal gaming businesses. You may do this by phoning its (888) 314-2682 – 24-hour anonymous – tip line.
Approximately 40% of the Sports Betting Market Is Illegal Gambling
The AGA estimates illicit sportsbook operators make up over 40% of the current US sports betting market. According to current forecasts, legal sports wagers in the US are anticipated to exceed $100 billion by 2022.
According to the report, 49% of sports bettors made a wager with an unlicensed operator in the preceding year.
In the United States, legal online sports betting is now widely used. For iGaming, the same cannot be stated.
Only six states in the US, including Michigan, have legalized online casinos.
The AGA claims that illegal iGaming websites generated $337.9 billion in wagers in the US. It translates into an income loss of more than $13.5 billion. This market will be more than three times bigger than the legal iGaming industry in the US in 2022 ($5 billion).
48% of Americans who played online slots or table games in the previous year did so illegally, according to the AGA.