Key Takeaways
- States with comprehensive gambling regulation reduce offshore activity to roughly 38%, versus a 79% national baseline
- Markets offering both iGaming and sports wagering capture approximately 62% of total gambling value
- Sports-betting-only jurisdictions lose about 74% of their market to unlicensed offshore operators
- New Jersey and Michigan demonstrate the strongest domestic retention, exceeding 70%
- Offshore gambling persists in every U.S. state, though comprehensive regulation dramatically reduces its prevalence
For more than ten years, American states have been gradually opening their doors to legal online gambling. Despite this progress, offshore operators continue to dominate the landscape. Fresh research from Blask’s 2025 U.S. iGaming landscape study reveals precisely how effective different regulatory approaches have been.
When examining all U.S. states collectively, offshore platforms command a 79% market share. This leaves just 21% of total online gambling value within state-regulated, legal channels.
The effectiveness of regulation varies dramatically based on what each state permits. Jurisdictions offering comprehensive gambling options—combining casino products with sports wagering—demonstrate substantially better retention of gambling revenue within their borders.
Comprehensive Regulation Yields Strongest Results
New Jersey successfully captures approximately 73% of its online gambling activity through licensed operators. Michigan performs even more impressively, keeping roughly 75% of market value within its regulated ecosystem.
Across states with full regulation, the average domestic retention rate reaches about 62%. This performance reduces offshore market share to approximately 38%.
These jurisdictions provide players with complete access to legal gambling entertainment, including slots, classic table games, and comprehensive sports betting markets. This full-service approach proves critical in drawing users away from unregulated platforms.
The performance gap between these states and sports-betting-only markets tells a compelling story. States limiting legalization to sports wagering alone experience offshore market shares averaging around 74%.
New York, despite being the largest betting market by consumer spending, watches roughly 61% of total gambling value flow to offshore sites. Ohio faces an even starker reality, with 82% of activity occurring on unlicensed platforms.
The explanation is simple. Bettors seeking casino games in these restricted markets have nowhere legal to turn. Consequently, they migrate to offshore platforms that provide the full gambling experience they desire.
Legalizing sports betting alone fails to address the complete spectrum of gambling demand. Without casino offerings, states effectively surrender substantial market segments to unregulated competitors.
Market Maturity Influences Domestic Performance
Market maturity plays a significant role in channelization success. Rhode Island, among the most recent states to implement comprehensive regulation, continues experiencing higher offshore than domestic activity. Its offshore share remains above 50%.
This pattern indicates that proper regulatory structure alone isn’t sufficient—licensed operators need time to establish consumer confidence and develop competitive product offerings. Transitioning gambling activity from offshore to domestic channels doesn’t happen overnight.
New Jersey and Michigan benefit from years of market development. Their regulatory longevity directly contributes to their superior performance metrics.
The research delivers an unambiguous message to state legislators. Comprehensive regulation spanning both casino gaming and sports betting reduces offshore activity by over half compared to national averages.
However, it doesn’t eradicate offshore gambling completely. Not a single U.S. state has achieved zero offshore participation.
The Blask research characterizes regulation as existing on a continuum rather than functioning as an on-off mechanism. Legalization establishes favorable conditions for domestic market capture, but completely eliminating offshore gambling remains an unrealistic goal.
For states currently weighing their regulatory options, the evidence strongly suggests that sports-betting-only frameworks leave the majority of gambling activity unaddressed. Maximum gains require offering a comprehensive suite of regulated products.
Rhode Island’s initial performance demonstrates that newly regulated markets require patience. Even with complete regulatory frameworks established, building substantial domestic market share unfolds gradually, dependent on operator commitment and earning consumer confidence over time.
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