the staff of the Ridgewood blog
Ridgewood NJ, New Jersey’s legalized online sports betting industry is a financial powerhouse, generating over $1 billion in revenue from nearly $13 billion in bets placed in 2024. Yet, even as legal wagering soars, experts say the illegal gambling underworld is alive and well, fueled by everything from high taxes to organized crime.
The question remains: Why does illegal gambling persist when legal betting is a national sensation?
The Tax Trap: Why Bettors Go Undercover
The short answer, according to Robert Boland, a sports law professor at Seton Hall Law School, is simple: Taxes.
The New Jersey online sports betting tax rate is already 13%, and Governor Phil Murphy is raising it to 19.75% in the 2026 fiscal year state budget.
“They want to get around the rules and barriers that exist,” Boland explains. Bettors often choose illegal bookies because they offer the opportunity to take home more winnings by avoiding the state’s significant tax levy.
Organized Crime & High-Profile Busts
Illegal gambling isn’t just a minor sideline—it’s a massive source of revenue for organized crime. Attorney General Matthew Platkin has announced multiple crackdowns this year, exposing large-scale operations:
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April Bust: 39 arrests, including a Prospect Park councilman, linked to alleged Mafia-backed gambling rings.
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November Bust: 14 more arrests linked to an alleged multimillion-dollar sports gambling ring, with the man in charge allegedly a member of the Lucchese crime family.
The fact that illegal gambling has been around for centuries, unlike the relatively new legal industry, makes it resilient, but recent crackdowns show prosecutors are actively working to dismantle these large organized crime operations.
Age, Ads, and Addiction: The Other Driving Forces
Experts point to several other factors pushing people toward unregulated, illegal betting sites:
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Access and Age Restrictions: College and high school students who don’t meet the legal age requirement (or financial ability) still want to participate, turning to illegal methods to place bets.
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Advertising Saturation: Sports betting companies in the U.S. spent over $600 million on advertising in 2024. This constant, high-visibility advertising, often featuring major celebrities and athletes, normalizes betting to a larger, younger audience who may not know the difference between legal and illegal sites.
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The Addiction Crisis: Since legalization, calls to New Jersey’s gambling addiction helpline have surged by 277%.
Solutions from Abroad: The UK Model
As the industry grapples with the surge in addiction, experts like Lia Nower, director of gambling studies at Rutgers University, suggest looking at mature models, such as the United Kingdom.
Nower’s research highlights that the UK uses affordability guidelines, where operators partner with credit agencies to intervene if a person begins spending beyond their means.
Ultimately, while legal gambling has shifted about 40% of former illegal bettors to the regulated market, the industry needs to evolve. Seton Hall Law School’s Gaming Law Bootcamp, run by Devon Corneal, is actively trying to facilitate conversations between operators and regulators to implement best practices and curb the worst effects of this soaring industry.
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