Unregulated Online Gambling Reaches $5.9 Trillion Annually, Reports Reveal
Massive Scale of Unregulated Online Gambling Worldwide
A recent report from Gaming Compliance International (GCI) reveals that unregulated online gambling is projected to generate approximately $5.9 trillion in global wagers by 2025. This staggering figure surpasses the GDP of all countries except the United States and China, highlighting the immense size of this unmonitored industry.
Impact of Prediction Markets on Gambling Estimates
The $5.9 trillion estimate includes betting activities across various unlicensed sectors such as sports wagering, online casinos, poker, cryptocurrency gambling, and lottery platforms. GCI now divides the online gambling industry into three categories: regulated, unregulated, and a newly defined “unacknowledged” segment. This latter segment includes social casinos, sweepstakes, pseudo-investment products, skins trading, TikTok contests, and notably, prediction markets.
Products within this unacknowledged category replicate gambling mechanics like placing stakes, relying on chance, and offering potential rewards but are not formally regulated as gambling under current laws. Prediction markets fall into this group, despite ongoing debates about whether their contracts should be classified as gambling or financial instruments.
With an institutional valuation of $9 billion—boosted by Intercontinental Exchange’s $2 billion purchase of Polymarket—prediction markets occupy a unique niche in GCI’s framework. In the United States, they are regulated as financial products overseen by the Commodity Futures Trading Commission (CFTC), whereas internationally, they are typically considered unregulated gambling.
Perspectives from Industry Leaders
Ismail Vali, president of GCI, explained that the online gambling market has fragmented into multiple layers, with prediction markets serving as a key example. Discussing their evolution, Vali highlighted that prediction platforms started in the 2010s as fintech applications focused on assets such as Bitcoin and stock prices, gradually shifting to enable users to bet on diverse outcomes.
GCI CEO Matt Holt emphasized the report’s implications, warning that the unregulated online gambling sector’s vast scale can no longer be overlooked. He underscored that operating largely beyond regulatory frameworks, this industry has grown into one of the largest global economic systems based on its estimated $5.9 trillion wager volume.
Understanding the Numbers in a Global Context
To illustrate the influence of prediction markets, consider the U.S. Super Bowl, where Kalshi, a leading prediction market platform, handled $1.2 billion in trades during the event. This accounts for roughly one-third of the $3.1 billion prediction market volume related to the Super Bowl estimated by GCI.
Comparing these figures globally puts them into perspective: the projected 2025 GDP of the United States is around $30 trillion, China’s economy about $19 trillion, and no other country exceeds $5 trillion. Against this backdrop, unregulated online gambling ranks as the third largest economic flow worldwide.
Ultimately, GCI’s data shows that only 22% of the global gross gaming revenue comes from regulated markets, leaving a dominant 78% share under the control of unregulated operators.
