Gray markets have become big business. The American Gaming Association estimates Americans bet $511 billion with illegal and unregulated operators, costing legal sites $44.2 billion in gross gaming revenue and states $13.3 billion in taxes.
American regulators can’t do much about foreign criminal competitors. But you would think state regulators would become concerned when the very companies the regulators themselves have licensed are the ones which may be breaking the law. The $511 billion estimate is only how much Americans bet. It does not include the hundreds of billions of dollars in wagers which our licensed gaming sites accept from players overseas, where gambling is illegal.
But regulators don’t even have a definition of what makes a gray market gray. At least not a definition that works.
Everyone should agree, at least, on what makes a black market black. This is a jurisdiction, usually a nation or state, where it is a crime to make or accept a wager. Iran, for example. It illegal under U.S. federal law to do business with Iran. There are exceptions; but taking wagers online from gamblers physically in Iran, is not one of them.