Hundreds of millions of dollars in legal sports betting revenue are flowing into Florida each year, but a growing shadow gambling economy is siphoning money away from the state and its taxpayers.

Attorney General James Uthmeier is working to rein it in. He’s also asking the state lawmakers to raise the stakes by steepening penalties.

A key objective for Uthmeier in 2026 is to address the rapid expansion of illegal and legally ambiguous gambling activities across the state, particularly as they intersect with the Seminole Tribe’s Gaming Compact.

While the Seminole Tribe’s legal, state-sanctioned sports betting platform, Hard Rock Bet, has generated hundreds of millions of dollars for Florida, a parallel and largely unregulated ecosystem has emerged with it. This includes illegal brick-and-mortar casinos, offshore gambling platforms, sweepstakes-style gaming apps, fantasy sports platforms whose offerings blur into sports betting and federally regulated prediction markets like Kalshi and Polymarket.

Each of those developments presents problems. Together, they have complicated enforcement and raised questions about compliance with state law and the 2021 Gaming Compact, which expanded Seminole-exclusive gambling across the state, including online sports betting operations projected to yield Florida $4.4 billion through 2030.

“We stand by the Compact with the Seminole Tribe,” Uthmeier told Florida Politics. “It’s been a huge success, and it’s a great way to ensure that Florida taxpayers are getting the benefit of a significant revenue share to the state, moving through an application and gaming apparatus that is highly regulated, safe and free from illicit activities.”

Uthmeier hasn’t been idle. He said he’s taken down numerous large-scale gambling operations over the past year. The highest-profile takedown occurred in June, when Uthmeier’s Office of Statewide Prosecution charged Osceola County Sheriff Marcos López and others in what it called a “massive Central Florida illegal gambling operation.”

The arrest followed an investigation by Uthmeier’s Office in collaboration with the U.S. Department of Homeland Security and the Florida Department of Law Enforcement. López, whom Gov. Ron DeSantis suspended on the same day of his arrest, faces racketeering and conspiracy charges for alleged crimes that generated nearly $22 million in illicit proceeds.

Uthmeier has said such illegal gambling operations are frequently tied to money laundering, human trafficking and other serious financial crimes beyond gambling violations.

To tackle online gambling platforms that operate from overseas, like Bovada and MyBookie, Uthmeier is looking into disrupting payment processor servers, web hosts that facilitate unlicensed gambling and access via virtual private networks (VPNs). It’s not an easily scalable effort — Uthmeier describes it as something of a “whack-a-mole” challenge — but it will be a big priority in 2026.

For fantasy- and sweepstakes-focused platforms, the Attorney General’s Office has issued subpoenas to several companies. Uthmeier and his staff plan to meet with leaders from those companies and others early in the year to exchange information, allow the companies to present their cases and inform them of the strict guidelines by which they must abide to continue doing business in the state.

Some fantasy sports and sweepstakes operators have publicly disputed characterizations of their offerings as illegal gambling, but said they’d work with regulators and lawmakers to ensure compliance with state law.

Meanwhile, operators of federally regulated prediction markets argue their products fall under the Commodity Futures Trading Commission’s jurisdiction, setting up a potential legal battle over whether state gambling laws apply to these platforms.

Alongside Uthmeier’s efforts, the Florida Gaming Control Commission (FGCC) has been ramping up enforcement operations through partnerships with local, state and federal law enforcement agencies.

In 2025, the FGCC said it seized nearly $14.5 million and 6,725 slot machines from illegal casinos — up from $7.1 million and 1,287 slot machines in 2024. The Commission said it also entered into 29 new memoranda of understanding with various law enforcement bodies.

New legislation to back it up

Uthmeier is also backing 2026 bills to strengthen penalties for illegal gambling and related advertising, both online and in physical locations. Many of the penalties in statute now are misdemeanors and, he said, insufficient and “make the risk-reward analysis very imbalanced.”

“We’re not doing enough to disincentivize people from engaging in this behavior,” he said. “People stand to make tens of millions of dollars through these operations, and getting a misdemeanor is really just a slap on the wrist.”

One measure now advancing in the House (HB 189) would institute a sweeping overhaul of Florida’s gambling laws, dramatically expanding criminal penalties, regulatory authority and enforcement tools across nearly all forms of wagering.

The bill, sponsored by Fort Pierce Republican Rep. Dana Trabulsy, targets illegal casinos, online gambling, fantasy sports, slot machine trafficking, advertising and even transportation tied to illegal gambling.

It would also tighten ethics rules, add felony penalties for repeat or large-scale violations and strengthen the authority of the FGCC, which assisted in a multicounty seizure of hundreds of illegal gambling machines last month through a crackdown initiative dubbed “Operation Funny Money.”

Another bill (SB 204) by Fleming Island Republican Sen. Jennifer Bradley is narrower and more procedural, focusing primarily on amusement games and slot machines.

The bill, which awaits its first Committee hearing in the Legislature’s upper chamber, would require specific organizations — especially veterans’ groups — to seek advance approval from the FGCC when legality is unclear.

It would also clarify when slot machine shipments are lawful, including on tribal lands, and modestly strengthen penalties for unlawful possession. Unlike the House bill, SB 204, in its current form, would not broadly expand criminal categories or address online gambling, fantasy sports, or advertising.

There’s also Seminole Republican Rep. Berny Jacques’ proposal, HB 591, which would dramatically overhaul Florida’s gambling enforcement framework, reclassifying many existing gambling-related crimes into higher felony tiers and creating new felony offenses for internet gambling, advertising gambling, transporting gamblers and manipulating games.

Unlike HB 189, which strengthens existing enforcement authorities while maintaining a focus on gaming integrity and compliance, HB 591 would pre-empt local regulation entirely, expanding the FGCC’s influence across nearly all gambling-related activity.

Some lawmakers and advocacy groups, including veterans’ organizations, have warned that broad felony expansions could unintentionally sweep in lawful activities or charitable events and need clearer definitions to avoid unintended consequences.

Jeremy Redfern, Uthmeier’s Deputy Chief of Staff, told Florida Politics that those who run unlawful gambling markets while providing no avenue for transparency or accountability to Florida consumers face a tough road ahead.

“Our office is working with the Florida Legislature to increase penalties and the Gaming Commission to take down illicit markets,” he said. “2026 will be a record year in the fight against illegal gambling and the other major crime it brings to our state.”