It's bad. Really. For just one metric, see The Wash Post series from last year that documented the significantly higher rate of deaths in unlicensed daycares in VA as compared with licensed ones.
http://www.washingtonpost.com/investigations/nine-va-children-died-in-unregulated-day-care-in-2014-the-deadliest-year-in-a-decade/2014/12/30/bf302040-8161-11e4-81fd-8c4814dfa9d7_story.html