This rise of online gambling in the U.S. came from the changing legal landscape of electronic payments and the repeal of the Professional and Amateur Sports Protection Act of 1992 (PASPA) in 2018 by the Supreme Court.
We’ll break down the state of online gambling in the U.S., including which jurisdictions offer legal iGaming—and what’s next for a growing industry that could potentially reach a market volume of nearly $40 billion by 2029.
Overview of U.S. online gambling laws
Although the Hotel Nevada originally opened in Las Vegas in 1906, legal gambling experienced a boom period in the 20th century that began in Nevada in 1931. With the resurgence of a legal market, the Golden Gate Casino re-emerged in 1955.
The Golden Gate Casino and Hotel was renamed in 1974, and gambling eventually spread to Atlantic City, New Jersey. In 1978, the Resorts Casino Hotel became the first legal casino to open outside Nevada.
However, the laws stipulated that casinos could only open in Atlantic City and not elsewhere in the Garden State.
With the advent of modern technology, including the internet and mobile phones, the U.K. Gambling Act 2005 served as a precursor to online gambling laws in the U.S.
Legal iGaming from 2011 to 2018
What began in Nevada and spread to the East Coast derived from taxes on casino games. Thousands of slots and hundreds of table games brought in millions of dollars for monthly and annual state revenue from legal gambling.
The poker boom in the U.S. between 2003 and 2006 resulted from the use of “pocket cams” during televised poker broadcasts, including the World Series of Poker (WSOP). However, a gray market of offshore poker sites and interstate online gaming came under the federal government’s scrutiny.
On April 15, 2011, the U.S. Department of Justice (DOJ) shut down the top online poker sites, including Full Tilt Poker and PokerStars, claiming those sites violated the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA).
Known as ‘Black Friday’ in the online poker community, the economic aftermath led some states to consider legalizing iGaming.
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Delaware, Nevada, and New Jersey legalize iGaming
The DOJ’s scrutiny of the Federal Wire Act of 1961 (which prohibited the transmitting of sports wagers over phones or wired devices) led to a rescinding of their initial findings. In other words, the DOJ said the Wire Act shouldn’t apply to online gambling.
A new legal interpretation of UIGEA also found that the law didn’t apply to internet gambling within individual states.
Nevada
Nevada’s Gaming Commission then became the first state agency to take action by pursuing the legalization of interactive gaming (iGaming) in December 2011. In June 2012, Nevada issued the first two licenses in the U.S. for legal iGaming to Bally Technologies and IGT.
Delaware
Also, in June 2012, Delaware legalized online gaming through the State Lottery by passing the Delaware Gaming Competitiveness Act of 2012. On November 8, 2013, Delaware became one of the first states to launch online casinos.
New Jersey
New Jersey Governor Chris Christie sought to compete with Nevada’s iGaming laws. However, he vetoed online gaming legislation in 2011 and 2012. With the requested revisions in place, Christie signed an amended New Jersey Casino Control Act on February 26, 2013.
Later that year, the first online casinos in NJ launched on November 26.
Multi-State Internet Gaming Agreement (MSIGA)
With legal iGaming markets up and running, Delaware and Nevada developed the Multi-State Internet Gaming Agreement (MSIGA) in 2014 to create player pools and use revenue-sharing for interstate online gaming.
While state lawmakers in Pennsylvania eventually passed a gambling expansion in October 2017, New Jersey signed on to MSIGA that same year.
Repeal of PASPA in 2018
One primary legal challenge in the lead-up to the 2018 repeal of PASPA came from New Jersey lawmakers. With a voter-approved state constitutional amendment in 2011, legislators enacted the Sports Wagering Act in 2012 to legalize sports betting at casinos and racetracks.
Five professional sports leagues challenged the new legislation, claiming it violated PASPA.
The state then became entrenched in a legal battle regarding sports betting legalization that continued under Democratic Governor Phil Murphy, who took office in January 2018.
On May 14, 2018, via Murphy v. National Collegiate Athletic Association, the U.S. Supreme Court ruled PASPA unconstitutional, ushering in a sea change of legal sports betting nationwide.
Less than a month later, on June 11, Governor Murphy signed Assembly Bill 4111 to legalize sports betting in the Garden State. Murphy placed the state’s first two sports bets on June 14 at Monmouth Park.
States Where Online Gambling is Legal (2024)
According to the American Gaming Association (AGA), sports betting is live and legal in 38 states, including Washington, D.C., as of May 24, 2024.
However, the Indian Gaming Regulatory Act of 1988 somewhat hinders the legislative processes associated with legal iGaming (online casinos and poker sites).
In the U.S. gaming industry, states with native tribes must form partnerships with gambling companies like BetMGM, DraftKings, and FanDuel.
For that reason, legalizing sports betting is much easier than regulating online casinos, although the legal framework is similar.
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States where iGaming is legal
Online gambling companies must partner with in-state operators for licensing purposes. Here’s a brief overview of the states where iGaming is legal:
- Connecticut – legalized online casinos and sports betting in May 2021; the first online casinos launched in October of that year. Per state law, there are only two operators: DraftKings (Mashantucket Pequot Tribal Nation—Foxwoods Resort Casino) and FanDuel (Mohegan Sun Casino).
- Delaware – became the first state to legalize iGaming (June 2012); online casinos and poker sites launched in October 2013. There are only three operators: Bally’s Dover, Delaware Park, and Harrington Casino & Raceway, each accessible through the BetRivers app.
- Rhode Island – became the seventh state to legalize iGaming (June 2023); Bally’s launched the state’s only online casino in March 2024.
- Michigan – legalized iGaming and sports betting in December 2019; the state’s iGaming market went live in January 2021. Only 15 online casino licenses are permitted in MI. With approval from the Michigan Gaming Control Board, the state signed onto MSIGA in 2022 to join the poker pool with DE, NJ, and NV.
- New Jersey – legalized iGaming in February 2013 and launched its first gaming sites in November, with approval from the NJ Division of Gaming Enforcement. NJ signed onto MSIGA in 2017. About three dozen internet gaming sites are available in the Garden State, with $1.73 billion in online gambling revenue generated between January and September of 2024.
- Pennsylvania – legalized through a gambling expansion in 2017, iGaming launched in 2019. As of 2024, there are about two dozen PA online casino options, including poker sites. PA could sign onto MSIGA in the near future.
- West Virginia – legalized iGaming in 2019, which launched in 2020. Like Michigan, WV only allows up to 15 online casino licenses. WV signed onto MSIGA in 2023.
States expected to legalize online gambling soon
Since online gambling is often a hot-button issue among state legislations, especially during an election year, we didn’t expect many states to legalize iGaming in 2024.
It’s usually commonplace for states to build upon prior sports betting legislation to legalize online casinos and poker sites. Between January 2023 and March 2024, these states launched mobile sports betting:
- Florida
- Kentucky
- Maine
- Massachusetts
- North Carolina
- Ohio
- Vermont
Here are a handful of states considering iGaming legislation in 2025 and beyond:
- Illinois: Introduced in 2021 and 2023 and considered in 2024, an Internet Gaming Act included a 15% tax on Internet gaming, the establishment of licensing for Internet gaming platforms, and overall iGaming regulations. Bills in the House (Rep. Jonathan Carroll) and Senate (Sen. Cristina Castro) stalled in 2023. Rep. Edgar Gonzalez, Jr. introduced HB2239 that same year. Although it was assigned to the Gaming Committee in January 2024, it stalled in the Rules Committee in April. Castro’s SB1656 nearly passed in 2024. So, a version of the Internet Gaming Act could finally pass both legislative chambers in 2025.
- Maryland: Vanessa E. Atterbeary introduced HB1319 in February 2024 to legalize online casinos, similar to a prior bill by State Senator Ron Watson. The bill passed in March but stalled in the Senate Budget & Taxation Committee at the end of the legislative session. The Internet Gaming – Authorization and Implementation bill could gain traction in 2025.
- New York: State Senator Joseph Addabbo introduced legislation in 2022 and 2023 to legalize online casinos. Assemblyman J. Gary Pretlow created a companion bill in 2024, which stalled in committee. The bill could be re-introduced in 2025.
States like Iowa, Maine, and Wyoming may also re-consider iGaming legislation during their legislative sessions in 2025.
The future of online gambling in the U.S.
The future of online gambling in the U.S. depends on various factors, like revenue sharing with native tribes and fears of ‘cannibalization.’ Some in-state casinos and workers’ unions remain vocal opponents of iGaming legislation.
With that in mind, Atterbeary’s bill in Maryland appropriates funds for any potential job losses of casino workers.
Another future trend is betting on eSports, such as virtual sports or video game tournaments. In addition, online gambling companies may incorporate virtual reality (VR) headsets and boost artificial intelligence (AI) capabilities into their platforms while continuing to form partnerships with professional sports leagues.
So, players could essentially gamble on a sporting event via VR—as if they were watching it live at the stadium—and then switch to a live dealer online blackjack table during a break in the action.
Broadcast corporations, sports leagues, and gambling companies may continue to collaborate to offer sports betting and iGaming directly on a cable subscription or mobile app streaming service, similar to simulcasts of off-track betting (OTB) horse racing.
Online gambling continues to see record-breaking growth
Early in 2024, the AGA reported an annual record of $66.5 billion in U.S. commercial gaming revenue in the previous year. That represented a third consecutive year of record-breaking highs.
In 2023, online gaming accounted for nearly 25% of commercial gaming revenue, another record. Revenue at online casinos grew to $6.2 billion, an almost 23% annual increase.
As of October 2024, the AGA’s Commercial Gaming Revenue Tracker reported that the combined revenue of iGaming and online sports betting in August increased by about 29% to $1.42 billion year-over-year.
Year-to-date (YTD) commercial gaming revenue in the U.S. generated almost $47 billion. That included an online gaming market share of 25.2% in August, representing nearly a 4% increase from the previous year.
The future of online gambling looks bright
With the addition of legal sports betting and iGaming in more states—and gaming companies possibly accepting cryptocurrencies like Bitcoin, Bitcoin Cash, Ethereum, and Solana as payments—online gambling could continue to see record-breaking expansion.
One estimate predicts the legal online gaming market in the U.S. to generate around $30 billion in annual revenue by 2030.