FT. LAUDERDALE, Fla. – Fighting the massive unregulated and illegal gaming market presents a daunting challenge for state-level regulators.
As discussed at this month’s SBC Summit Americas, however, simply defining that market and trying to pin down who operates within those bounds might be an even meatier task for those tasked with doing so.
Speaking on the “Crackdown on Unregulated Gaming: Where States Draw the Line” panel at the conference, a group of deeply experienced regulators and consultants discussed how chasing illegal operators in the modern age requires adaptability. That becomes especially important as companies shift tactics and delivery methods seemingly overnight in the face of potential crackdowns.
“From an investigative standpoint, we have to not get caught up in all the different labels and naming,” said Carl Herold, Director of Law Enforcement for the Florida Gaming Control Commission.
Emerging forms of illegal gaming, notably in the iGaming space, drove a 22% increase in illegal activity between 2022 and 2025, according to the American Gaming Association. As of last year, the casino trade group estimates that Americans wager $673.6b annually with unlicensed gaming operators.
State vs. federal authority always a challenge
Lacking authority to pursue remedies outside their individual jurisdictions, state gaming regulators often target operators through cease-and-desist letters and similar threats of enforcement. Notably in recent years, they have applied the tried-and-true approach to daily fantasy sports, sweepstakes games and prediction markets, even going so far as bringing since-halted criminal charges in the case of the latter.
Yet Susan Bala, co-founder and director of Advance Compliance Technology, said that tack alone falls short in a digital age.
“They’ll just open up another 10 sites, 20 sites under a different name,” Bala said.
Panel moderator George Rover of Princeton Global Strategies, a longtime New Jersey Division of Gaming Enforcement executive, highlighted previous efforts in the Garden State to involve federal authorities in adding teeth to state efforts. Those efforts met with resistance from feds with higher priorities, he said.
“I’m not giving you two FBI agents for 18 months to do an offshore investigation. I can’t spare it,” Rover said he was told.
Given that reality, Rover suggested state regulators and authorities collaborate closely to figure out best practices that can apply across jurisdictions.
“You’ve got to fight them aggressively in ways that have never been contemplated,” Rover said.
Can public help report illegal gaming help?
Some noted offshore operators extend US advertising and marketing efforts so far as to fly directly in the faces of regulators. For example, noted offshore sports betting company Bovada ran TV advertising during March Madness broadcasts of the men’s NCAA basketball championship in each of the last few years.
Ed Martin, president of the Sports Betting Regulators Association, said the public actually can help their membership by making the FCC and other authorities aware of the pitches.
“People should file complaints about unregulated gaming ads on radio and TV,” Martin said.
States using the courts as well
In 2026, state-level court battles among regulators, prediction market companies and the federal Commodity Futures Trading Commission (CFTC) represent the most active fighting front for states against illegal gaming.
One such battle is taking place in Massachusetts, where 37 states joined together in an amicus brief supporting the Commonwealth’s lawsuit against Kalshi that is playing out in state court. Massachusetts Gaming Commissioner Nakisha Skinner spoke on the panel and expressed confidence her state’s approach will succeed.
“We’ll let the process play out in the courts but we think that ultimately the Supreme Court will agree,” Skinner said.
Overall, Rover summed up the feeling of the panel on using whatever tools are available to state regulators: permission is promotion.
“if you’re not aggressively (going after) it, you’re subtly allowing it. It’s a tough situation we’re all in but hopefully it changes in the future,” Rover said.
