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Why does illegal gambling still exist in New Jersey when betting is legal?

By: Lucas Frau
NorthJersey.com
USA Today Network - New Jersey

..... The multibillon-dollar sports betting industry is more popular hat ever in New Jersey and across ht country. sportsbooks records recorded a histrionic near $14 billion in revenue nationally in 2024, with people placing $147.9 billion in sports bets. Favorite athletes and celebrities can be seen frequently on DraftKings commercials.
..... As legal gambling soars, however, illegal gambling rings still exist, even her in New Jersey.
..... Attorney General Matthew Platkin announced two busts of illegal gambling operations this year. [2025] In April, [2025] 39 people, including a Prospect Park councilman, were arrested on charges relating to alleged Mafia-backed gambling.
..... This month, [11/2025] another 14 people were arrested on charges related to their alleged connection to an illegal multimillion-dollar gambling ring. The man in charge was allegedly Joseph M. "Little Joe" Perna, 55, who is said to be a member of the Lucchese crime family.
..... NBA coach Chauncey Bilups and player Terry Rozier were among the 34 people charged for their alleged ties to rigged poker games orchestrated by the Mafia, the FBI said in October. [2025]
..... The question remains: Why does illegal sports gambling occurs when legalized gambling is a national sensation?
..... Robert Boland, a sports law professor at Seton Hall law School, said the very short answer to that question could be summed up in one word: taxes.
..... "They want to get aorta the rules and barriers that exist," Boland said. "Illegally betting has found its audience."
..... The tax on Online sports betting in New Jersey is 13%, and Governor Phil Murphy raised the Online sports besting tax to 19.75% in the 2026 fiscal year state budget.
..... Bettors sometimes chooses illegal sports bookies instead of legalized gambling sites because of the opportunity to take home more winnings.
..... Many people want to chance to participate in the action, but not everyone has access to legalized Online sports gambling, which is another reason why people turn to the illegal gambling world, said Devon Corneal, associated dean of Seton Hall Law School.
.....With the normalization of sports betting also comes a larger audience. college and high school students who don't meet the age requirement to bet on sports legally or those who do not have the finances can turn to illegal methods.
..... Boland said there needs to be more support and conversation about the normalization of sports betting. He said young people see so many advertisements for sports betting that they may not know the difference between what is legal and illegal. Research from the American Gaming Association showed that 70% of bettors who use illegal offshore sites did not realize they were unregulated sportsbooks.
..... Adverting of sports bets has skyrocked since the legalization of gambling in New Jersey in 2018. In 2024, sports betting companies in the United States spent over $600 million on advertising, according to AGA data, almost doubling the spending from 2020.
..... Lia Nower, director of gambling studies at the Rutgers University School of Social Work, agrees hat larger profit margins and underage gambling contribute to the illegal gambling sphere.
..... Nower said legal gambling has curtailed illegal betting to some extent. Her research showed that 40% of people who are now gambling legally previously gambled in the illegal market. However, legal gambling has introduced many more people to betting who would not have gambled before, partly because of the extreme amount of adverting.
.... Legalized sports betting is a relatively new industry, unlike illegal sports betting, which has been around for centuries, Recent crackdowns from government officials on illegal gambling rings can be the first step for prosecutors to try to find larger organized crime operations, Boland said.

Sports betting in New Jersey

..... Unlike its illegal counterparts, legalized gambling is clearly welcomed with open arms. In New Jersey, bettors place nearly $13 billion in sports bets in 2024 as $1.09 billion in revenue was collected by the industries, announced the division of Gaming Enforcement.
..... As the sports betting audience grows, so does addiction to gambling. In New Jersey, calls to the helpline since the addictions ahas increased 177% since the legalization seven years ago, Reuters reported. Many more may be hooked but do not seek help. A way to combat the surge in addictions could be to look at the United kingdom's sports betting model, Nower said. Her research at Rutgers evaluates the bets placed in the state and has created an algorithm that predicts people who gamble at a higher intensity. Nower said the United Kingdom uses affordability guidelines, in which operators partner with credit agencies and can intervene if a person starts spending beyond their means.
..... "Their gambling market is much more mature than ours," Nower said.
..... At Seton Hall Law School, students, professors, lawmakers, operators and others involved in the sports betting industry are having conversations to try to understand this growing world. The law school hosts a Gaming Law, Compliance and Integrity Bootcamp that highlights these conversations.
..... Corneal, who runs the boot camp, said conversions are in place to recognize sports betting problems and where the industry can improve.
..... "There is a discussion on whether the sports betting industry is already out of hand. If we have a bigger problem, operators are grappling with that," corneal said. "That is what we are trying to do, to facilitate those conversation. Provide operators with best information and guidance to encourage the industry to be as in line with the guidelines as they can be."
..... Students who participate in the programs have gone on to work as regulators for operators like FanDuel or DraftKings or for sports teams.
..... The hope is for operators to comply with the state's guidelines such as age limits and geolocation restrictions: bettors cannot place a wager on in-state college teams while in New Jersey.
..... Within the legal and illegal sports betting sphere, there seem to be more questions than answers. As in industries such as alcohol and tobacco, the sate and federal governments can intervene with more restrictions, but for now, responsible participation is needed, experts say.

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