The history of iGaming in the United States has been tumultuous, yet the future holds great promise. Navigating through the complex legal framework, characterized by semi-autonomous states, has resulted in a gradual but steady progress towards iGaming-friendly regulations.
Across the nation, there’s a discernible pattern emerging as states one by one move towards legalization, with each bill representing a step forward. Despite the deliberate pace, the momentum of iGaming’s acceptance appears inexorable.
As we delve deeper into this evolving landscape, we find ourselves plunging into the murky depths of iGaming within the United States, where every turn reveals new challenges and opportunities.
What is IGaming
iGaming, also referred to as internet gambling or online betting, is often misunderstood by individuals, including bloggers and digital marketers, who mistakenly equate it with gaming activities such as those found in popular video games like Fortnite. The distinction lies in the fact that iGaming involves real-money wagering on various games of chance or skill over the internet, whereas gaming in the context of Fortnite typically revolves around entertainment and competition without financial stakes. For expert insights into iGaming strategies and opportunities, consider consulting with professionals such as Hellagoodmarketing, an iGaming agency.
However, this line blurs when considering the potential introduction of random loot boxes in games like Fortnite, which could resemble elements of chance present in certain forms of iGaming.
IGaming Variations
iGaming encompasses a range of activities, including:
- Online poker.
- Online casinos and roulettes.
- Online lotteries.
- Horse racing betting.
- Sport betting.
- ESports.
Now that we’ve established our focus, let’s delve into the legal standing of iGaming in the United States.
Is IGaming Legal in the USA?
The regulations governing iGaming operate on two distinct levels:
- Federal.
- State.
Due to the ambiguous definition of iGaming, the prevailing understanding was that its regulation fell under the 1961 Wire Act. However, in response to inquiries from New York and Illinois in 2011, the Department of Justice (DOJ) issued an opinion limiting the application of this act to interstate sports betting exclusively. This didn’t legalize iGaming outright in the US but rather rendered it not explicitly illegal. Despite legal debates over the subsequent decade, the status quo remained largely unchanged, leaving the decision on iGaming regulation to individual states.
While traditional brick-and-mortar gambling was confined to specific jurisdictions and Indian reservations, the seven states that permitted iGaming after the initial DOJ interpretation mostly awarded online gaming licenses to entities already holding gambling licenses. Some variations exist; certain states allow third-party entities to seek iGaming licenses, or casinos can operate under different brands, managing seemingly independent online gambling platforms. However, predominantly, established enterprises handle iGaming operations.
States Where iGaming Is Legalized
Below, you’ll find a list of states where iGaming has been legalized, accompanied by explanations of their operational frameworks. It’s worth noting that while traditional brick-and-mortar gambling is permitted in more states, the number of states allowing legal online gambling is comparatively smaller.
Connecticut
On October 19, 2021, Connecticut embraced the future of gaming by legalizing iGaming, allowing individuals over the age of 21 to engage in online gambling activities. Within the state, three distinguished entities have been authorized to provide such services:
- Mohegan Casino, under the Mohegan Tribe’s stewardship, stands out as the second-largest casino in the United States, with only one larger counterpart located in Oklahoma.
- Foxwoods Casino, operated by the Pequot Tribe, adds to the state’s prestigious gambling offerings.
- The Connecticut Lottery, a trusted name in gaming, also participates in the online sphere.
These establishments have each forged partnerships with notable online platforms to expand their services: Foxwoods has aligned with DraftKings, Mohegan Casino collaborates with FanDuel, and the Connecticut Lottery has teamed up with Rush Street Interactive, whose online sportsbook is known as PlaySugarHouse.
New Jersey
New Jersey, renowned as the leading revenue producer in both online and land-based gambling activities in the United States, is home to nine brick-and-mortar casinos. These establishments have the autonomy to market their services under their original branding. Additionally, they possess the flexibility to “reskin,” which means they can adopt a different brand identity in collaboration with external gambling entities. This strategic approach significantly amplifies the variety of legal iGaming platforms accessible within the Garden State.
Delaware
In 2012, Delaware took a pioneering step by legalizing online poker, lottery, and casino games, becoming one of the early adopters of internet-based gambling in the United States. The state boasts three racinos, each offering unique online gaming experiences:
- Delaware Park Online, representing Delaware Park, provides a range of online betting options.
- Dover Downs Online Gaming, affiliated with Dover Downs, offers its own suite of online gambling services.
- Harrington Online, linked to Harrington Raceway, extends its gaming reach into the digital realm.
All three entities collaborate with 888 Holding, a prominent figure in the online gambling industry, to furnish Delaware residents with a comprehensive array of online gambling services.
Michigan
Michigan embraced the digital gambling landscape in December 2019 through legislation that sanctioned online betting. The state is home to 26 conventional casinos, alongside 9 virtual platforms steered by seasoned players in the industry, including prominent names like FanDuel and DraftKings. With its rapid growth in the online gambling sector, Michigan is swiftly closing in on New Jersey’s leading revenue figures and is anticipated to reach an equivalent revenue level within the forthcoming year.
Pennsylvania
In 2017, Pennsylvania took a significant step forward by legalizing iGaming, but it wasn’t until July 2019 that the state witnessed the launch of its first online casino. The Commonwealth of Pennsylvania has allocated a total of 39 iGaming licenses, segmented into three distinct categories: 13 licenses are dedicated to peer-to-peer poker games, another 13 for individual play on simulated slot machines, and the remaining 13 are for solo play on simulated table games that involve banking against the house.
As of now, Pennsylvania boasts 16 active online casinos, marking a notable expansion in the state’s digital gambling footprint.
Rhode Island
In 2023, Rhode Island marked a significant milestone by becoming the seventh state in the United States to authorize iGaming, distinguishing itself as the first state to enact such legislation within that year. This move positioned Rhode Island at the forefront of the expanding online gambling landscape in the nation.
West Virginia
Since March 2019, West Virginia has been accommodating the interests of digital gamblers aged 21 and above by providing various legally-licensed online casinos. Presently, the Mountain State is home to five terrestrial casinos, and it is anticipated that this number will grow in the future, reflecting a burgeoning interest in gaming and potential expansion in the industry within the state.
Legal Landscape and Future Outlook for iGaming Across Various States
- Alabama: Only social casinos that do not involve real money transactions are permitted.
- Alaska: All forms of online betting remain illegal, with no imminent changes anticipated.
- Arizona: The state permits online sports betting and fantasy sports, but online casinos are not allowed.
- Arkansas: Online gambling is prohibited. Authorized gambling activities are confined to two land-based casinos.
- California: Online gambling is illegal, though there’s anticipation for sports betting legalization within the year. Meanwhile, land-based tribal casinos operate legally.
- Colorado: Legal gambling avenues are extremely limited, with no options for online or offline gambling except for social casinos, a state lottery, and a horse racing track.
- Florida: While state laws do not explicitly reference online gambling, it’s inferred that offshore gambling sites are permissible. There’s also ongoing discussion about potential iGaming legislation.
- Georgia: The state enforces a strict ban on monetary gambling, both online and offline. Alternative gaming options include a small casino on a cruise ship and social or virtual currency-based casino models.
- Hawaii: No form of gambling is legal in Hawaii.
- Idaho: iGaming in all its forms is illegal.
- Illinois: The state hosts several land-based casinos, but the online realm is limited to sweepstakes casinos.
- Indiana: Home to 14 casinos and a racetrack, Indiana allows only sweepstakes casinos online. However, online sports betting is legal.
- Iowa: Real money online gambling isn’t allowed; only social and sweepstakes casinos are available, though sports betting is legal.
- Kansas: Online gambling is unregulated and de facto illegal, with legal gambling confined to tribal and state-owned casinos.
- Kentucky: No casinos exist; real money online gambling is prohibited.
- Louisiana: With 24 land-based casinos, Louisiana doesn’t offer legal online casinos, though online sports betting is permitted.
- Maine: Offers two land-based casinos but no online gambling options, except for sweepstakes casinos.
- Maryland: Only social casinos are legal.
- Massachusetts: Permits games of skill like fantasy sports but not iGaming, despite having land-based casinos.
- Minnesota: Has 18 tribal casinos but no legal online betting options.
- Mississippi: Boasts 36 land-based casinos without legal online gambling alternatives.
- Missouri: Prohibits online gambling, with 14 land-based casinos available.
- Montana: Offers numerous electronic gambling sites and tribal casinos, but iGaming is prohibited.
- Nebraska: Allows only social and sweepstakes casinos online.
- Nevada: Online poker and sports betting are legal; however, online casinos are not.
- New Hampshire: Has a ban on commercial casinos; only bingo halls and social casinos are permitted.
- New Mexico: Does not allow sports betting or online gambling, except in tribal casinos.
- New York: Expected to legalize online casinos, with sports betting already legal and multiple casinos and racinos in operation.
- North Carolina: Offers three land-based casinos but no other legal gambling options.
- North Dakota: Hosts 27 casinos with practice online poker only; iGaming is illegal.
- Ohio: Features 11 casinos and racinos; sports betting became legal in 2023.
- Oklahoma: With 110 casinos, Oklahoma does not have legal iGaming.
- Oregon: Sports betting is legal, iGaming is not, outside the state’s casinos.
- South Carolina: Has strict regulations, with no casinos or legal online gambling.
- South Dakota: Permits online sports betting through Deadwood casinos but no iGaming.
- Tennessee: Lacks casinos and only permits online social casinos.
- Texas: Has a single casino operating federally; no iGaming is allowed.
- Utah: Prohibits all forms of gambling.
- Vermont: Doesn’t license online gambling, with no casinos present.
- Virginia: Offers land-based casinos but no other legal betting options.
- Washington: Licenses tribal casinos but prohibits online casinos.
- Wisconsin: Only legalizes social online casinos.
- Wyoming: Hosts tribal casinos and legal sports betting but no online gambling.
Overview of iGaming Legislation Landscape
The current buzz around online gambling suggests a transformative shift in the industry within the next one to two years. Beyond the most conservative regions, numerous states are contemplating the legalization of online sports betting and casinos, attracted by the potential influx of tax revenue. Observers are keenly watching the trailblazing states to assess the outcomes of their legislative changes. Key concerns, such as the impact on crime rates and public health, are under close scrutiny, as these factors will play a crucial role in shaping future policies and attitudes toward the expansion of online gambling.
Advertisers in the gaming industry currently navigate their strategies based on the legal landscape of each state. They can:
- Market legal online casinos or sports betting platforms within states that have sanctioned these activities, leveraging the established legal framework to reach audiences interested in gambling.
- Promote social or sweepstake casinos in states where traditional online gambling has not yet been approved. This approach not only complies with current regulations but also helps build a brand presence and customer base in anticipation of potential changes in legislation that might allow for expanded gambling activities.
The evolving landscape of iGaming in the United States appears to be gravitating towards a model where land-based casinos, holding state licenses for online gambling, enter into collaborations with prominent global players in the industry. This partnership strategy is likely to manifest in various branding approaches: online gambling services might operate under the established names of either the land-based casino, the global operator, or even adopt a completely new brand identity, essentially offering a ‘reskinned’ version of the original site.
Given the gradual but significant transformations in the U.S. market, it is prudent to stay informed by closely monitoring industry developments. For advertisers, this context suggests a strategic approach of initiating or incrementally increasing investment in campaigns for legal social casinos. Such proactive engagement not only capitalizes on the current legal environment but also facilitates the accumulation of valuable data and expertise, preparing advertisers to adeptly navigate and leverage the full spectrum of iGaming opportunities as they emerge.