Little is known about people who gamble in illegal settings, and the extent of differences in gambling behavior between legal and illegal gamblers is unclear. The present study examined the characteristics of illegal gamblers and whether they engage in more frequent and severe gambling behaviors, and demonstrate greater motivation for gambling and substance use than legal gamblers. A cross-sectional online survey recruited 1251 people who gambled in the preceding year, of whom 13% (N = 161) participated in illegal gambling. Significant differences were found in gambling behaviors between illegal and legal gamblers in all outcomes examined. People who participated in illegal gambling reported more frequent participation in almost all types of legal gambling, more types of "multi-bets," more severe and high-risk gambling behaviors, higher motivations to gamble, and higher frequencies of substance use than those who engaged in legal gambling. Logistic regressions revealed that the stronger associations with illegal gambling were among problem gamblers (OR = 17.80; CI 9.21-34.4; p < 0.000), among the age group of 29-41 years (OR = 6.16; CI 3.15-12.3; p < 0.000), among moderate-risk gamblers (OR = 5.54;; p < 0.000) and among secular individuals (OR = 4.11; CI 1.73-9.77; p ≤ 0.001). A comprehensive gambling policy is needed in Israel to address illegal gambling. The policy should attend to harm reduction, treatment, prevention, and enforcement. Additionally, more studies are needed to examine gambling behavior and other risk behaviors of illegal gamblers.