Gambling is a multi-million dollar industry in the United States and its presence is increasing. While the gambling industry is lucrative, in what states are online gambling legal? What are the laws on online gambling in different states?
The online gambling industry has seen major changes in recent years, with more than half of US states legalizing online sports betting since 2018.
While most states permit sports betting, only seven states currently allow legal online casinos and poker, and progress in this area has been slower. Despite this, the industry is expected to generate a revenue of US$19.14bn in 2023, suggesting a bright future.
So, what are the states that allow online gambling? What are the regulations and requirements to start an online gambling business?
You can find all the answers below and also get an overview of the history of the online gambling industry in the US.
Is online gambling legal in the USA?
Online gambling is legal in the USA but the laws and regulations differ from state to state. While some legalized online sports betting and online lotteries, online casinos are not permitted in several states. But not all forms of gambling are prohibited by federal law in the United States.
Gambling and gaming are closely regulated industries and you need to get a gambling business license to operate.
The regulations for sports betting and other forms of gambling in the US are constantly changing. So, if you’re a high risk merchant or looking to start your online gambling business, it’s important to stay up-to-date on the latest laws and regulations in different states.
There are different sets of laws to consider when discussing sports betting or gambling. There are federal laws that apply to all states. These laws set the overall tone for gambling but are not very specific.
The USA has several federal betting laws that have had a significant impact:
- The federal law passed in 1992, Professional and Amateur Sports Protection Act (PASPA), prohibited states from legalizing traditional sports wagering.
- The Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006 targets unregulated offshore betting sites that accept American customers by prohibiting financial institutions from processing transactions to/from unlicensed gambling websites.
- The Federal Wire Act of 1961 prohibits the use of “wire communications” to assist in placing wagers across state lines.
Individual states are granted the autonomy to establish their own regulations regarding online gambling and betting, provided that these regulations do not conflict with federal legislation.
Let’s delve into the regulations of various states to find out which ones permit online gambling. We’ll take a closer look at the rules governing online sports betting, online casinos, and online lotteries in these states.
What states can you start an online gambling business in the USA?
Online gambling is permitted in seven US states, namely Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, West Virginia, and soon Rhode Island.
While online sports betting has gained popularity and is legal in over 30 states, the legalization of online casinos has been slower, resulting in limited progress.
Let’s look at the what states can you gamble online and where it is illegal in the US:
Alaska – Casino gambling may be permitted on international cruise ships visiting Alaska. The legalization of online gambling in Alaska might depend on the legalization of sports betting.
Arizona – While Arizona legalized sports betting in 2021, it is possible that online casinos may become legal in Arizona in the near future.
Arkansas – Mobile sports betting became legal in February 2022, but online casinos remain illegal. Licensing for legal online casinos in Arkansas may come after the legalization of mobile sports betting.
Colorado – Despite the legalization of sports betting in Colorado in 2019, online casinos are still prohibited. With the presence of legal online sportsbooks such as DraftKings, FanDuel, and BetMGM, the legalization of online casinos in Colorado appears likely.
Connecticut – Legalized online casinos on October 19, 2021, with DraftKings and Mohegan Sun Casino (FanDuel) offering a variety of traditional casino games and slots.
Delaware – Is one of the first states to legalize online gambling and allows online casinos to offer poker, casino games, and sports betting.
Florida – Despite the legalization of sports betting in 2021, online casinos are prohibited. The industry remains uncertain due to ongoing legal disputes between the state and the Seminole Tribe.
Georgia – Attempts to modify the state’s gambling laws in 2020 did not gain sufficient support. While online casinos are not permitted, “social casinos” are accessible, offering free-play slots and table games.
Illinois – The current legal status prohibits online casinos, although online sportsbooks such as BetMGM and FanDuel are fully operational within the state.
Indiana – Sports betting was legalized in 2019, but online casinos remain illegal. Despite multiple attempts, various online casino bills failed to gain approval from Indiana’s state legislature.
Iowa – While mobile sports betting was introduced in 2019, online casinos remain illegal. Iowa may be one of the states closest to legalizing online casinos in 2023.
Kansas – Recently legalized sports betting, but online casinos remain illegal. It’s possible that partnerships could lead to the legalization of online casinos in the future.
Louisiana – Sports betting is legal, but online casinos are not. However, sweepstakes casinos and offshore options are available, and online casinos may become legal soon.
Maryland – Legalized sports betting in 2020, but online casinos are still illegal. Social casinos are the only legal option for playing slots and table games online.
Massachusetts – While online casinos are illegal, sweepstakes and social gaming are allowed. The state is currently focused on legalizing sports betting, but online casinos may become legal in the future.
Michigan – Legalized online sports betting and online casinos, allowing gamblers to legally play at BetMGM Online Casino, as well as other online casinos such as FanDuel, DraftKings, BetRivers, Caesars, and WynnBET.
Mississippi – Legalized sports betting, but online casinos remain illegal, with only two state casinos offering online wagers. However, it is possible that online casinos may become available in the next few years.
Missouri – Lawmakers are currently working on a bill to legalize sports betting, but online casinos are still not allowed. The only option for online gambling in the state is through social casinos.
Montana – Sports betting has been legalized, but it is tightly regulated. Gamblers can only place bets at licensed kiosks in casinos, bars, and restaurants. Online casinos are still illegal, and it is unlikely to change soon as the state wants to protect its land-based operators.
Nebraska – Has a unique approach to gambling. Sports betting legislation has been passed, but there is no legal framework for it yet. It may take some time before online casinos are permitted in Nebraska.
Nevada – Has allowed sports betting since 1949. Online poker and mobile sports betting are legal in the state, but online casinos are not.
New Hampshire – Only mobile sports betting is legal, and online casinos are illegal except for social gaming and sweepstakes sites.
New Jersey – Is one of the most gambling-friendly states in the US, with both mobile sports betting and online casinos legal. There are over two dozen legal online casinos partnered with Atlantic City operators, offering a wide variety of bonuses and promotions.
New York – While there is a large potential market for online casinos, it is currently illegal. However, mobile sports betting is legal and generates significant tax revenue. There is a possibility of legalizing online casinos in a few years.
North Carolina and North Dakota – Have legalized retail sports betting at tribal casinos, but online sports betting and casinos remain illegal in both states. While the legalization process may be slow, there could be further developments in coming years.
Ohio – Legalized sports betting in 2021, but it wasn’t operational until Jan 1, 2023. While online casinos are not permitted, offshore casinos and poker sites can be used.
Oregon – Online sports betting was legalized in August 2019. The state restricts casino gambling to tribal and social casinos, making online casinos illegal.
Pennsylvania – Has legal online sports betting and online casinos. Online casinos offer a variety of games such as slots, roulette, blackjack, and baccarat.
Rhode Island – Online sports betting has been legal for years, but online casinos are prohibited. Currently, the only option for online wagers is Sportsbook Rhode Island, operated by IGT and William Hill and regulated by the Rhode Island Lottery.
Tennessee – In 2019, online sports betting was legalized and the online-only framework was launched in November 2020. While online casinos are still illegal, major operators like BetMGM, FanDuel, and DraftKings have been available in the state for some time.
Texas – Operating an online casino is illegal, but citizens can access offshore gambling sites. The sports betting legalization process stalled in 2021, but it’s possible that it may finally get passed in 2023.
Virginia – Legalized online sports betting in 2020. With FanDuel, DraftKings, Caesars, and BetMGM maintaining sportsbooks in the state, the legalization of online casinos could be coming soon.
Washington, D.C – Legalized sports betting in 2019 and online wagers were allowed at certain venues and stadiums in 2021. Online casinos are still illegal, but the nearby MGM National Harbor Casino could be one of the first to allow internet casino gambling in the city.
West Virginia – Is one of the seven states that offers legal online casinos. They offer top slots, table games, poker rooms, and live dealer games. Online casinos are perfectly legal in West Virginia.
Wyoming – Legalized online sports betting in 2021, but online casinos are still illegal. It has a unique system where sports betting can only be done online. BetMGM, DraftKings, and FanDuel already operate their online sportsbooks there, which could pave the way for legalizing online casinos in the state.
To get an overview, here’s a snapshot of all the states that allow online gambling and those that currently don’t or are considering legalizing it in the near future:
Online gambling laws & regulations by state
Gambling is legal in most of the USA, with state-specific laws regulating different types of gaming at the local level. All states in the USA, except for Utah and Hawaii, allow some form of legal gambling.
Only a few states have legalized online gambling that is regulated at the state level. Similar to legal sports betting, casino gaming is legal in many states. However, not all states that allow physical casinos permit online casino gaming.
Some states have even passed laws to prohibit all forms of online gambling, despite having successful retail casino industries.
Regarding regulations for online casinos in the United States, each state is responsible for regulating online casinos. To offer online casino products and services within a state, gambling companies must apply to the appropriate gambling or gaming department.
However, in regulated states, there may be a restriction on the number of licenses granted. When applicable, a state’s gambling regulatory authority oversees all online casino gaming regulation.
For online gaming regulations, most states have their own government department or division dedicated to gaming, while others have separate commissions for racing and gaming.
States have faced logistical hurdles in their efforts to enter the online gaming market due to UIGEA which prevents US banks from funding internet betting establishments, causing some challenges for states.
Future of gambling in the USA? – Which states in the US can launch online casinos soon?
As the legalization of online gambling activities continues to expand and the market grows, operators will have a broader range of locations to initiate their operations.
The increasing competition among online casinos is anticipated to result in enhanced services and supportive regulations over time.
To ensure the protection of players and enable them to enjoy their preferred forms of online entertainment in a safe and responsible manner, stricter regulations and local responsible gambling initiatives will be implemented.
As the industry evolves and the convenience of online gambling increases each year, it is advisable for online gambling merchants to closely follow new developments.
In the near future, several states are expected to launch online casinos:
- Indiana has plans to launch online casinos in 2023
- Illinois intends to introduce gambling sites by the end of 2023 Massachusetts has proposed launching within the next two years
- North Carolina is making progress towards legalization,
- Rhode Island has already legalized online casinos and will go live in 2024.
- New Jersey extended its online casino law for five more years which will expire in November 2028.
If you’re considering starting an online gambling business, keep in mind the legal requirements, regulations, and business licensing needed for different states in the United States.
👉 If you are searching for online gambling licensing options, look for preferred gambling jurisdictions in the US or in countries and markets where online gambling is legal.
Key takeaways
Online gambling businesses can be quite challenging to operate due to various factors. One of the main concerns is the complexity of the legalities surrounding online gambling.
Each state in the U.S.has its own set of rules and regulations, which leads to a lack of uniformity. This lack of consistency can potentially create legal issues that may impact your online gambling company and its transactions.
Additionally, many online gambling businesses have offshore locations, which can raise concerns such as money laundering in countries with less strict reporting regulations. Even if your online gaming site doesn’t have any offshore locations, the industry as a whole is still considered high-risk.
In such a competitive field, it’s crucial for online gambling businesses to prioritize certain aspects. This includes providing a user-friendly interface, implementing strong data security measures, ensuring secure and smart payment processing, and obtaining a gambling merchant account.
When it comes to handling payments for online gambling, it’s vital to choose high-risk payment providers that specialize in serving industries like yours. They should also provide fraud prevention methods, robust security measures, and comprehensive payment solutions.
Because your business is classified as high-risk it is advisable to partner with a reliable high-risk payment provider to ensure a secure and hassle-free payment experience for your users.
How PayFasto can help start your online gambling legal in the US?
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With our extensive global network and local expertise, our gambling merchant account ensures seamless transactions internationally and locally.
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We also provide reliable customer support and our team is available 24/7 to assist you with any inquiries or concerns you may have.
