Skills being equal, the unlicensed guy will make a lot more money than the licensed guy every time. All it takes is a little word of mouth advertising and the fact that the unlicensed guy usually works for cash. Not only does he skip all of that pesky business overhead, he usually doesn't pay taxes.
If you really want to bust these guys, I would start with the IRS. They seem a lot more interested in the little guy than the state contractors board.
