BBB® gambling and gaming study: Grey market and illegal gambling thrives amid inconsistent laws and regulations
Santa Barbara, CA (8/20/2025) -- From 2022 to mid-2025, Better Business Bureau® received nearly 200 scam reports and over 10,000 complaints related to online gambling and gaming. Some scam reports involved outright theft, while complaints showed a pattern of unclear terms and consumer misunderstandings. In some cases, people lost tens of thousands of dollars.
What you’ll learn:
Grey market and illegal gambling sites are widespread
Legal protection is minimal on these platforms
Users need to read, research and understand fine print on winning and withdrawals, and understand any regulatory complexities.
With billions of dollars flowing through this global industry, a risky underbelly of pseudo-gambling, illegal gambling and scams has developed. Laws and regulations in the gaming industry vary between states and provinces and can be confusing to navigate. Furthermore, impostors, bad actors, and scammers use sophisticated tactics, making it hard for people to tell the difference between a legitimate company and those seeking to deceive them.
In “Grey markets and illegal gambling: BBB study finds consumers confused and upset, amid hundreds of unlicensed and unverified online casinos and sportsbooks” BBB’s International Investigations Initiative examines patterns of complaints and reports, reviews the amount of money lost and shares stories to avoid common issues.
Key findings:
Online grey market and illegal gambling operations are widespread, and legal protections are few and far between on these sites
Users report confusion, misleading terms and claim unfair losses as the industry has exploded in popularity
A complicated mix of laws and regulations across North America means potential users must do their homework to find legitimate options
Key stats:
$103 billion – Estimated size of the online gambling and gaming industry, according to researchandmarkets.com
$402 billion – One estimate of the size of the illegal gambling market, according to the American Gaming Association.
Numbers across North America (2023-2024):
10,189 – Business complaints made to BBB
216% increase between 2022 and 2023
174 – BBB Scam Tracker reports
More than 100% increase over the last two full years
Scam survivor stories:
Anthony in Georgia told BBB he was playing an online slots game, where he paid in for the chance to win money. When he won $1,900, Anthony went to withdraw the funds, but he was told by the company that the game wasn’t allowed in his state, and the payout could not be made. When he looked at the website however, they still were allowing people located in the state to sign up and play, and there was no mention of it being banned when he deposited funds.
Meanwhile, Arema in California told BBB she was playing a slots game with free spins. It was a site she used often, and she had previously deposited money to play. While using her free spins, she won $300. The website pivoted, saying she needed to deposit funds to get her winnings, despite those terms not being listed anywhere on the website.
BBB’s red flags for online gambling or gaming services:
Big promises around payouts
Tempting ads without details
Overseas business locations
Sweepstakes-style games
Payment through cryptocurrency
Typos in names
BBB has tips to help avoid any issues with gambling or gaming sites:
Read your state and provincial laws. There are many different laws for online gambling, depending on where you live. Make sure you understand your local laws before engaging with any gambling establishment or casino.
Check for proper licensure. Even if your state allows gambling, it may have a limited list of allowed websites. After checking whether you are legally allowed to gamble, check with your state’s gaming regulatory agency to see who is licensed.
Read the fine print. The reality of how winning and withdrawal works may be different than your first impression on a website. Check out the details of a specific service and fully understand how they work before sending them any money.
Even legitimate websites may freeze winnings. There are many reasons why a casino or sportsbook might freeze winnings, even if the money is rightfully yours. Understand the rules of a website and what might cause freezes to happen. Know what actions to take if your account is frozen.
For over a decade, BBB’s International Investigations Initiative has advocated for an ethical marketplace by conducting deep-dive research on the riskiest and most common scams reported across North America.
Visit BBB.org/scamstudies for more information on theft and other scams.
Visit BBB.org to check out a business or register a complaint and BBB Scam TrackerSM to report a scam.
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