Key Takeaways
- States with comprehensive online gambling regulation reduce offshore market activity to approximately 38%, versus a 79% national baseline
- Markets offering both iGaming and sports wagering keep roughly 62% of gambling revenue within regulated channels
- Sports betting-only jurisdictions continue losing approximately 74% of total value to unregulated offshore operators
- Michigan and New Jersey demonstrate the strongest domestic retention, capturing over 70% of market activity
- Complete elimination of offshore gambling remains unachievable, though comprehensive regulation substantially reduces it
For more than ten years, individual U.S. states have been implementing legal frameworks for online gambling. Despite this progress, unregulated offshore operators continue dominating the broader market. Fresh insights from Blask’s 2025 U.S. iGaming landscape report reveal precisely how effective different regulatory approaches have been.
When examining all U.S. states in the analysis, offshore platforms command approximately 79% of the market nationally. This leaves just 21% of total online gambling activity flowing through legal, regulated domestic channels.
These figures vary considerably based on what type of regulatory framework each jurisdiction has implemented. Jurisdictions providing access to both iGaming products and sports wagering demonstrate significantly better performance in retaining gambling activity within state borders.
Complete Regulatory Frameworks Achieve Superior Domestic Retention
New Jersey’s regulated market captures approximately 73% of online gambling activity occurring within its borders. Michigan performs slightly better, keeping roughly 75% of its total market activity on licensed platforms.
Across all comprehensively regulated jurisdictions, the average domestic retention rate sits around 62%. This translates to offshore market share declining to roughly 38%.
These jurisdictions provide consumers with comprehensive legal gambling options, including slots, traditional casino table games, and sports wagering. This complete product offering proves critical in redirecting consumers from unlicensed websites.
The difference becomes striking when comparing these results to sports betting-only markets. Jurisdictions that have authorized sports wagering without accompanying casino products average approximately 74% offshore market share.
New York, despite being the largest betting market measured by consumer spending, loses roughly 61% of its total value to offshore platforms. Ohio demonstrates even more dramatic leakage, with 82% of activity flowing to unlicensed operators.
The explanation is simple. Consumers seeking slot machines or table games in these restricted markets have zero legal alternatives. They consequently migrate to offshore platforms for these products.
Legalizing sports betting in isolation fails to address the comprehensive consumer demand for online gambling products. Without casino offerings, states effectively surrender substantial market segments to unregulated competitors.
Recently Launched Markets Face Extended Development Periods
Market maturity plays a significant role in outcomes. Rhode Island, among the most recently launched comprehensive markets, continues experiencing higher offshore activity than domestic participation. Its offshore share remains above 50%.
This pattern indicates that even optimal regulatory structures require time for licensed operators to establish consumer confidence and develop robust product offerings. Market channelization represents a gradual process, not an immediate outcome.
Both New Jersey and Michigan have benefited from multiple years of market development. Their operational longevity clearly reflects in their superior performance metrics.
The research presents unambiguous implications for state legislators and regulators. Comprehensive regulation encompassing both casino products and sports betting reduces offshore activity by more than half compared to national averages.
However, complete elimination remains beyond reach. Zero offshore activity has not been achieved in any U.S. jurisdiction.
The Blask research conceptualizes regulation as existing along a continuum rather than functioning as a binary solution. Legalization establishes favorable conditions for domestic market capture, but completely eliminating offshore gambling activity remains an unrealistic goal.
For jurisdictions still evaluating their regulatory strategy, the evidence indicates that sports betting-only authorization leaves the majority of market demand unaddressed. Maximum domestic market capture requires offering a complete range of regulated gambling products.
Rhode Island’s initial performance demonstrates that newly regulated markets require patience. Even with comprehensive regulation implemented, building substantial domestic market share demands time, sustained operator investment, and gradual consumer trust development.
