Sports Betting and Online Gambling Legality in the USA

The online sports betting market in the US is booming, with revenue projected to hit US$9.65 billion by the end of 2024 and expected annual growth of 12.08% until 2029.

The US online gambling market size was estimated at $11.68 billion in 2023 and is expected to reach $13.03 billion by the end of 2024, growing at a CAGR of 12% from 2024 to 2030. The US online gambling market is expected to continue seeing double-digit revenue growth in the coming years and hit a $117.6 billion value by 2025.

All these numbers seem mind-boggling. Here, the legality aspect arises. How legal are online sports betting and gambling in the USA by the state? Which states have permitted both activities, and which allow only one?

States That Legalized Online Gambling and Sports Betting

The online and sports betting gambling legalization provides states with new revenue streams through taxation and enhances consumer choice and accessibility.

As of 2024, several states have enacted comprehensive laws that allow both online casino games and sports betting.

In fact, it creates a robust regulatory framework to ensure fairness and protect consumers.

See the fullest list of states where you can both legally gamble and bet online.

1. Connecticut

• Bill Name: HB 06451
• Year of Legalization: 2021
• Regulatory Authority: Connecticut Department of Consumer Protection (DCP)
• Key Personas: Governor Ned Lamont was a significant advocate for the legalization of sports betting and online gambling in the state.

Connecticut's legislation allows for online sports betting, casino games, and poker.

The state operates under a compact with the Mashantucket Pequot and Mohegan tribes, alongside the Connecticut Lottery, which is involved in the online gaming framework.

2. Delaware

• Bill Name: SB 200
• Year of Legalization: 2012 (online gambling), 2018 (sports betting)
• Regulatory Authority: Delaware Lottery
• Key Personas: Governor Jack Markell was instrumental in the initial push for online gambling legislation.

Delaware was among the first states to legalize online gambling and sports betting.

The state’s online gambling offerings include casino games, poker, and sports betting, available through its three casinos.

3. Michigan

• Bill Name: HB 4916
• Year of Legalization: 2019
• Regulatory Authority: Michigan Gaming Control Board
• Key Personas: Governor Gretchen Whitmer supported the legislation to expand gambling options in the state.

Michigan legalized both online sports betting and casino games, with a variety of platforms available for residents and visitors.

4. New Jersey

• Bill Name: A2578
• Year of Legalization: 2013 (online gambling), 2018 (sports betting)
• Regulatory Authority: New Jersey Division of Gaming Enforcement
• Key Personas: Governor Chris Christie was a key figure in advocating for sports betting legalization.

New Jersey has a robust online gambling market, offering both sports betting and casino games.

The state has set a precedent for other states with its comprehensive regulatory framework.

5. Pennsylvania

• Bill Name: Act 42
• Year of Legalization: 2017
• Regulatory Authority: Pennsylvania Gaming Control Board
• Key Personas: Governor Tom Wolf played a crucial role in the passage of the bill that legalized online gambling.

Pennsylvania allows for online sports betting, casino games, and poker, making it one of the most comprehensive online gambling markets in the country.

6. Rhode Island

• Bill Name: Act 31
• Year of Legalization: 2018
• Regulatory Authority: Rhode Island Lottery
• Key Personas: Governor Gina Raimondo was a strong proponent of the legislation.

Rhode Island legalized online sports betting and casino games, with a focus on integrating the state’s existing lottery system.

7. West Virginia

• Bill Name: HB 2934
• Year of Legalization: 2019
• Regulatory Authority: West Virginia Lottery Commission
• Key Personas: Governor Jim Justice supported the legalization efforts in the state.

West Virginia offers online sports betting and casino games, with several licensed operators providing services to residents.

States with Legal Online Sports Betting Only

The legalization of online sports betting in the United States has been a significant development. It particularly followed the Supreme Court's 2018 decision to strike down the Professional and Amateur Sports Protection Act (PASPA).

This ruling allowed states to regulate sports betting independently, leading to a wave of legislation across the country.

1. Arizona

• Bill Name: SB 1797
• Year of Legalization: 2021
• Key Personas: Governor Doug Ducey played a pivotal role in advocating for the bill.

Arizona allows online sports betting through partnerships with tribal casinos and various online sportsbooks.

2. Colorado

• Bill Name: Proposition DD
• Year of Legalization: 2019
• Key Personas: Governor Jared Polis supported the initiative.

Colorado's sports betting law permits both online and retail betting, but online casino games remain illegal.

3. Illinois

• Bill Name: SB 690
• Year of Legalization: 2019
• Key Personas: Governor J.B. Pritzker was instrumental in pushing the legislation.

Illinois offers online sports betting via multiple platforms but has not legalized online casinos.

4. Indiana

• Bill Name: HB 1015
• Year of Legalization: 2019
• Key Personas: Governor Eric Holcomb advocated for the bill's passage.

Indiana allows both online and retail sports betting, with various operators available.

5. Iowa

• Bill Name: SF 617
• Year of Legalization: 2019
• Key Personas: Governor Kim Reynolds supported the legislation.

Iowa permits online sports betting, focusing on mobile platforms, while online casino gaming remains prohibited.

6. Kansas

• Bill Name: SB 84
• Year of Legalization: 2022
• Key Personas: Governor Laura Kelly was a key advocate for the bill.

Kansas has legalized online sports betting, but has not authorized online casino games.

7. Louisiana

• Bill Name: Act 215
• Year of Legalization: 2021
• Key Personas: Governor John Bel Edwards supported the initiative.

Louisiana's sports betting legislation allows online betting, but online casinos are not included.

8. Maryland

• Bill Name: SB 940
• Year of Legalization: 2022
• Key Personas: Governor Larry Hogan was influential in the bill's passage.

Maryland legalized online sports betting through a voter referendum, but online casinos remain illegal.

9. Mississippi

• Bill Name: SB 2001
• Year of Legalization: 2018
• Key Personas: Governor Phil Bryant supported the legislation.

Mississippi allows app-based sports betting but only on-site at licensed casinos, with no online casino options.

10. Montana

• Bill Name: SB 26
• Year of Legalization: 2019
• Key Personas: Governor Steve Bullock signed the bill into law.

Montana permits online sports betting through a state-run platform, while online casinos are not available.

11. New Hampshire

• Bill Name: HB 480
• Year of Legalization: 2019
• Key Personas: Governor Chris Sununu played a significant role in the legislation.

New Hampshire has legalized online sports betting, but online casino games are not permitted.

12. New York

• Bill Name: SB 8412
• Year of Legalization: 2021
• Key Personas: Governor Andrew Cuomo was a key figure in the bill's approval.

New York allows online sports betting but has not legalized online casinos.

13. North Carolina

• Bill Name: HB 347
• Year of Legalization: 2024
• Key Personas: Governor Roy Cooper supported the legislation.

North Carolina recently legalized online sports betting, with no provisions for online casino gaming.

14. Oregon

• Bill Name: SB 1503
• Year of Legalization: 2019
• Key Personas: Governor Kate Brown signed the bill into law.

Oregon has legalized online sports betting, but online casinos are not part of the regulatory framework.

15. Tennessee

• Bill Name: SB 0016
• Year of Legalization: 2020
• Key Personas: Governor Bill Lee was instrumental in the legislation.

Tennessee proffers only online sports betting with no land-based casinos or online casino games.

16. Virginia

• Bill Name: HB 896
• Year of Legalization: 2021
• Key Personas: Governor Ralph Northam supported the bill's passage.

Virginia allows online sports betting but has not legalized online casinos.

17. Wyoming

• Bill Name: HB 133
• Year of Legalization: 2021
• Key Personas: Governor Mark Gordon was a key advocate for the bill.

Wyoming has legalized online sports betting, but there are no provisions for online casino games.

18. Maine

• Bill Name: LD 1352
• Year of Legalization: 2022
• Key Personas: Governor Janet Mills signed the bill into law.

Maine has legalized online sports betting, although it is not yet operational.

19. Massachusetts

• Bill Name: H 5164
• Year of Legalization: 2023
• Key Personas: Governor Maura Healey was influential in the bill's passage.

Massachusetts has legalized online sports betting, but it is not yet operational.

20. Ohio

• Bill Name: HB 29
• Year of Legalization: 2023
• Key Personas: Governor Mike DeWine supported the legislation.

Ohio has legalized online sports betting, but it is not yet operational.

States on Their Way to Legalize Online Gambling and/or Sports Betting

Several states are currently exploring the legalization of online gambling and sports betting. It reflects the growing recognition of the potential economic benefits and consumer demand for these activities:

• California: Multiple bills have been introduced to legalize sports betting, but no all-around legislation has been passed yet.
• Florida: Following a legal battle, there are ongoing discussions about re-establishing online sports betting in the state after it was briefly operational.
• Georgia: Bills have been introduced to legalize sports betting, but they have not yet passed.
• Hawaii: Hawaii has not legalized any form of gambling, but there are discussions about introducing sports betting legislation.
• Kentucky: Kentucky has recently legalized sports betting, and there are ongoing discussions about expanding to include online gambling.
• Minnesota: Efforts to legalize sports betting have been introduced, but no legislation has yet been enacted.
• Nebraska: While sports betting was approved in 2020, online gambling is still under consideration.
• New Mexico: Sports betting is allowed in tribal casinos, but there are no current efforts to expand to online sports betting.
• North Dakota: Online sports betting remains illegal, but there are discussions about potential future legislation.
• Oklahoma: Although there are land-based casinos, online sports betting has not yet been legalized, but discussions are ongoing.
• South Carolina: There have been proposals to legalize sports betting, but they have not gained significant traction.
• Tennessee: Efforts are underway to explore the possibility of adding online casino games.
• Virginia: While Virginia has legalized sports betting, discussions about expanding to online gambling are ongoing.
• Washington: While sports betting is allowed at tribal casinos, there are no current efforts to legalize online sports betting.

Why Online Gambling and Sports Betting Are Still Prohibited in Some States?

The legalization of online gambling and sports betting in the United States varies significantly from state to state, influenced by a complex interplay of cultural, economic, and political factors.

Jackpot Sounds advocates for the legalization of online gambling, emphasizing the importance of regulation and consumer protection. The project stands for legalizing online gambling because it can help combat illegal offshore operations that typically lack oversight and consumer safeguards.

By establishing a regulated market, states can ensure that gambling activities are conducted fairly, that players are protected, and that tax revenues are collected to benefit the public.

Jackpot Sounds highlights that legalization can also provide a safer environment for consumers, reducing the risks associated with unregulated gambling.

While some states have embraced the opportunities presented by these activities, others remain hesitant, often citing concerns about social implications, regulatory challenges, and competing interests.

Economic Incentives

One of the primary reasons some states have legalized online gambling and sports betting is the potential for substantial economic benefits.

States like New Jersey and Pennsylvania have seen significant revenue generation from legalized gambling, which has contributed to state budgets and funded public services.

For instance, New Jersey's online gambling market has consistently generated hundreds of millions in revenue, allowing for reinvestment in infrastructure and education.

The American Gaming Association reports that the gaming industry contributes over $40 billion annually to state and local economies, highlighting the financial allure for states considering legalization.

Cultural Attitudes and Political Climate

Cultural attitudes towards gambling play a crucial role in whether states choose to legalize online gambling.

States with a more permissive view of gambling—Nevada and New Jersey—have historically embraced various forms of betting, including online options.

In contrast, the states with conservative or religious populations, like Utah and Hawaii, have maintained strict prohibitions against gambling altogether.

The political climate also influences legalization efforts; states with strong lobbying from tribal casinos or other gambling interests may be more inclined to support legislation that expands legal gambling options.

Regulatory Challenges

The regulatory landscape surrounding online gambling is complex and often contentious.

States that have legalized online gambling have had to navigate a myriad of legal frameworks, including the Wire Act and the Unlawful Internet Gambling Enforcement Act (UIGEA).

The Department of Justice's shifting interpretations of these laws have created uncertainty for states considering legalization.

This regulatory ambiguity can deter states from pursuing legalization, as lawmakers may fear potential legal challenges or complications.

Competing Interests

In many states, competing interests among stakeholders complicate the legalization process.

Tribal gaming operators, commercial casinos, and racetrack owners often have differing opinions on how online gambling should be regulated. Some stakeholders push for exclusivity, fearing that online options could cannibalize their existing businesses.

For instance, states like Michigan have opted for a cautious approach, initially legalizing retail sportsbooks while delaying the rollout of online options to protect land-based operators.

The Future of Online Gambling and Betting Legislation in the USA

The future of online gambling and sports betting legislation in the United States appears to be on a trajectory toward broader acceptance and expansion, although significant challenges remain.

Several key trends and factors will shape the future landscape of the industry.

Growing Acceptance and Economic Incentives

The rapid growth of online sports betting, especially following the Supreme Court's 2018 decision to allow states to legalize it, has set the stage for increased acceptance of online gambling.

With 38 states and Washington D.C. now offering legal sports betting, many lawmakers are recognizing the potential for substantial tax revenue.

The Push for Online Casinos

While online sports betting has surged, the growth of online casino games has been slower, with only seven states currently offering legal online casinos:

• Connecticut,
• Delaware,
• Michigan,
• New Jersey,
• Pennsylvania,
• Rhode Island, and
• West Virginia.

Industry insiders, including executives from major companies like Fanatics and Bally's, argue that expanding online casino options is crucial for the industry's success.

Addressing Concerns Over Gambling Addiction

One of the significant hurdles to broader legalization is the concern over gambling addiction. Critics argue that making casino games easily accessible through mobile devices could exacerbate addiction issues.

Educating lawmakers about these protections and the benefits of regulated online gambling will be vital in addressing these fears.

The Debate Over Physical Casinos Cannibalization

Another ongoing debate within the industry is whether online gambling will cannibalize revenues from physical casinos.

For example, in Maryland, the introduction of online sports betting led to a reported 65% drop in in-person sports betting revenue at a major casino.

This debate will influence how states approach the legalization of online gambling.

The Bottom Line

Online gambling and sports betting in the United States are undergoing a significant transformation. While states like New Jersey and Pennsylvania have successfully established robust markets, others remain cautious due to concerns over gambling addiction, regulatory challenges, and the potential impact on physical casinos.