The Latest on US Online Casino Gaming Laws
The market size of the international online gambling industry was estimated at US $53.7 billion as of 2019 and the forecasted compound annual growth rate is a staggering 11.5% for the period from 2020 to 2027. It is of significant importance to note that this growth rate was extrapolated prior to the COVID-19 pandemic and the pandemic was thus not factored in.
Table Of Contents
- The Major US Online Gambling Acts
- US States That Have Legalized Online Gambling
- US States where only Land-based Sports Betting is Regulated
- US States where Sports Betting could soon be Legalized
- US States where you can Legally Play Lottery Games
- Challenges along the Path to Legalization of Gambling in the US
The UIGEA came into effect in 2006, but it has been through several amendments over the years. As of today, state governments have the autonomy to draft and enforce their own gambling related legislation and regulations.
The nature of the state-level gambling legislation is dynamic and rapidly evolving. In some states, the laws are virtually always up for contention even as we write. Regardless of the state-level laws, US players have plenty of off-shore online casino options which are trust worthy, safe and even offer some fantastic no deposit bonuses.
In this article, we take a closer look at all facets of US online casino laws in the various states.
The Major US Online Gambling Acts
A vast majority of gambling related laws were passed in the US prior to the advent of the internet. Today, the internet is widespread and easily accessible virtually all across the country and the older gambling laws simply lack any regulatory framework to address online gambling holistically. Below are brief summaries of such obsolete laws.
Federal Wire Act (1961)
The Federal Wire Act was passed in 1961 and it is where gambling was defined for the first time in the law books. It referred to gambling as being a planned event or series of events and laid out legal implications for any persons that transferred money using wire transfer services with the intention of using these funds for gambling activities. The penalty could include serving a prison sentence of up to 2 years. A monetary fine could also be charged to the perpetrator.
The Federal Wire Act served as the main section of US laws which dealt with online gambling. Years later, in 2014, there was a push to amend the Federal Wire Act and pass it as ‘Restoration of America's Wire Act' (RAWA).
Interstate Transportation of Wagering Paraphernalia Act
The Interstate Transpiration of Wagering Paraphernalia Act also came in to effect in 1961. This act was meant to support the Federal Wire Act by addressing certain gaps left by the Wagering Act. Essentially, by the virtue of this act, it was a criminal offence for anyone to transport gambling or bookmaking related paraphernalia. Items like gambling tokens, slips, tickets, invoices, bills, etc. for the purpose of gambling were prohibited from being transported.
Unlawful Internet Gambling Enforcement Act (2006)
In 2006, online gambling was finally addressed by the US lawbooks. The Unlawful Internet Gambling Enforcement Act which was simply referred to as the UIGEA. This Act dealt with both gamblers and online casino gambling website operators. The UIGEA focused on thwarting online gambling by exercising regulatory control over financial institutions and online payment systems.
The UIGEA proved effective in ousting a great deal of online casino website operators, payment systems processors, online gambling software providers from the US consumer markets. Despite this, a few providers remained operational in the market and found loopholes to continue offering their gaming services to players based in the US.
Professional and Amateur Sports Protection Act (PASPA)
The Professional and Amateur Sports Protection Act came into effect in 1992 and it targeted wagering on sporting events. Courtesy of PASPA, it was illegal to place sports bets through wire transfers. However, the scope of this act did not cover certain sports such as hound racing, horse racing, and state operated lotteries.
During this time, US States already had the autonomy to regulate sports betting and a few states, including New Jersey, had already legalized sports betting. After the passage of PASPA, such pro - sports betting states were asked to pass laws in order to reverse the legalization of sports betting within a given time frame.
A key moment in US sports betting legislation came when the state of New Jersey actually filed a lawsuit against the act and alleged that the act was unconstitutional. The lawsuit reached the Supreme Court and the ruling came out in favor of New Jersey. The implication of the ruling meant that all states could now legalize sports betting and several states grabbed the opportunity right away. Currently, several US states allow sports betting and many also allow casino gaming or are in the process of legalizing casino gambling.
Restoration of America's Wire Act (RAWA)
As we mentioned above, the Restoration of America's Wire Act is basically an evolved version of the original Wire Act. RAWA was passed in 2014 by two Senators, namely, Jason Chaffetz and Lindsey Graham.
When the US Department of Justice (DoJ) re-interpreted the Wire Act of 1961, New Jersey, Delaware, and Nevada legalized several forms of gambling including sports betting. The RAWA was an attempt to nullify the re-interpretation and to make the Wire Act applicable not only to sports betting but also to other forms of gambling.
The main objective of passing RAWA was to void the re-interpretation of the Wire Act passed in 1961. Essentially, the US Department of Justice had to interpret the Wire Act in 1961 as part of court proceedings and their re-interpretation facilitated the legalization of various forms of gambling other than sports betting in states such as Delaware, Nevada and New Jersey. The modified version of the Wire Act, RAWA, was an attempt at including other forms of gambling aside from sports betting into the oversight of the Wire Act.
Had RAWA come into effect, it could have spelled doom for the legalized online gambling markets in states like New Jersey, Delaware and Nevada. RAWA would have effectively outlawed the same of any lottery tickets. However, certain forms of gambling like betting on fantasy sports and horse racing would have remained unaffected.
US States That Have Legalized Online Gambling
Before we list and discuss US states where online gambling is regulated and legal, let's touch upon the states where gambling in any form is totally outlawed, this is a much shorter list. Currently, Utah and Hawaii don't allow any form of land-based gambling. However, online gambling has simply not been addressed in the laws of these states and online gambling is therefore in a kind of legal limbo as far as Utah and Hawaii are concerned.
In Utah, the restriction of all forms of online gambling is motivated by their conservative Mormon populous. Any form of gambling is not allowed by the Mormon faith. In Hawaii, the blanket ban on land-based gambling comes as a result of general consensus of the residents that gambling is destructive to society, and it can especially negatively impact young adults and tear apart families.
With the exception of the above mentioned two states, many US states allow gambling in some form or the other, so you may just be lucky enough to play at a real money casino and take advantage of USA No Deposit Bonuses and free spins. While a few states are further down the line of legalization, some states are just starting out.
At the time of writing, Michigan, Pennsylvania and New Jersey allow online sports betting, online poker and even online casino games like slots and table games.
Let's take a glimpse into some of the individual states where at least one form of online gambling is legal and their legislative outlook towards gambling.
Nevada is the gambling hub of the United States. It is home to some of the most iconic brick and mortar casinos not just in the United States but anywhere in the world. Considering the booming land-based casino industry, particularly in Las Vegas, Nevada seems to have refrained from offering any web-based casinos thus far.
When it comes to other forms of online gambling, Nevada had legalized them much before the Supreme Court PASPA verdict. In fact, you could play online poker legally in Nevada since 2013.
New Jersey deserves a special mention among US States in the matter of legalization of gambling. This is because New Jersey was the only state that retaliated against the passage of PASPA by filing a lawsuit against the act and alleging that the act was unconstitutional. The fact that the Supreme Court voted in favor of New Jersey in this lawsuit was a huge impetus for the legalization of online gambling not only in New Jersey, but several other states.
Currently, New Jersey continues as one of the biggest online gambling markets within the United States. The market size of New Jersey online gambling is estimated at $225 million per year. The sub-sect of the New Jersey state government which regulates gambling within the state is known as The New Jersey Division of Gaming Enforcement. New Jersey offers residents multiple forms of online gambling services in a legal, safe and regulated manner. New Jersey is home to over 15 state sanctioned online poker rooms, online sports betting platforms and online casino websites.
Indiana seems to be on the fence when it comes to legalization of online gambling. While they allow online sports betting at platforms such as FanDuel and DraftKings, online casino gaming and online poker continues to be outlawed in the state.
New Hampshire is similar to Indiana when it comes to online gambling regulations. They allow online sports betting through platforms such as DraftKings, however, there is no word about the legalization of online poker or online casino games at this time.
Delaware is a haven for online gamblers because all forms of online gambling is allowed here. In fact, Delaware was the very first state to announce the legality of online sports betting across the state after the PASPA ruling in 2018. Furthermore, the state had already legalized forms of online gambling such as online poker and online casino games even prior to the PASPA ruling.
Delaware and the World Series of Poker have struck a partnership and offering real money online poker to Delaware residents since 2015.
Michigan is another state where gamblers can indulge in any form of online gambling legally. The law which allowed this was the Lawful Internet Gaming Act and it was passed at the fag end of 2019. In 2020, Michigan's first land - based sports betting parlor opened its doors and the online version of this sportsbook was launched in early 2021 along with Michigan's first online casino. The state's first online poker room is said to be launching soon as well.
Pennsylvania was one of the US states to go ahead and regulate various forms of online gambling as soon as New Jersey won the Supreme Court ruling in the PASPA case. Since 2019, Pennsylvanian accepts applications for the licensing of online casinos, online sports betting websites and online poker rooms. The licenses are issued by the Pennsylvania Gaming Control Board.
Much Like Pennsylvania, West Virginia too wasted no time in legalizing some forms of gambling after the Supreme Court decision stating PASPA was unconstitutional. While the Supreme Court ruling came in 2018, just months later in 2019, West Virgina were all set to pass the West Virginia Interactive Wagering Act. They also formed the West Virginia Lottery Board to regulate gambling.
Residents of West Virgina can now legally play at online casinos as well as wager on sports online. Online sportsbook giants such as DraftKings and FanDuel are very popular with punters from across the state.
Online casinos were legalized in West Virginia in March of 2019, making the state of 5th in country to do so. Currently, residents await the legalization of online poker apps which is said to be in the pipeline.
Iowa regulates sports betting and allows both online sportsbooks as well as land-based sport betting parlors. Online sports betting in Iowa was legalized in the year 2019 and the first online sportsbook in the Iowa was launched later the same year.
Just after online sports betting was legalized, there were still some restrictions. Punters would not be able to place wagers using their own personal devices, but would instead have to actually visit a land - based sports betting parlor and use the devices there to setup their sports betting accounts and wager on sports. However, currently, this is no longer the case and residents can indulge in sports betting from their very own mobiles or computers.
Unfortunately, online casino gaming and online poker is still outlawed in Iowa.
In Colorado, residents had a say in the legalization of sports betting through voting process. Colorado residents voted in favor of legalization in November of 2019 and as a consequence, Colorado's first legal and regulated online sports betting platform opened its virtual doors in May of 2020.
On the other hand, online poker rooms and online casino websites still remain illegal in Colorado as of now. However, land based casinos themselves seem to be at forefront of the legalization moment for online casinos and have even started to apply for licenses in order to launch online versions of their casinos.
Oregon didn't miss a beat after the Supreme Court ruling came out in the PASPA case. Online sports betting was declared legal in October of 2019. There are now multiple online sports betting websites hosted from within the state of Oregon, however, online poker and online casino gaming is yet to be legalized at present. After Nevada, Oregon was the first US state to launch land - based sports betting shops for residents.
At the time of writing, online sports betting is allowed in Rhode Island. However, online poker and online casino websites are still illegal. Sports betting was legalized in Rhode Island in 2018 and people had the ability to place wagers on sporting events from their mobiles or PCs. The two retail sports betting centers that are popular in Rhode Island are Twin River Tiverton and Twin River Casino. The reason there are so few sports betting establishments, be it online or land - based, in Rhode Island is primarily because of the exorbitant tax rates. The establishment can only keep 17% of the revenue and nearly 51% of it goes towards the State as tax.
Tennessee legalized online sports betting as of April 2019 and just over a year later, Tennessee's first online sports betting website was launched in November 2020. The unique aspect of sports betting at Tennessee is the fact that it is one of the only states where residents are allowed to place wagers on sports online, but not in person at retail shops. There are no land-based betting parlors in Tennessee. Online poker and online casino gaming remain outlawed in Tennessee.
People living in Virginia can lawfully partake in online sports betting using various regulated mobile applications. While online sports betting has been legalized, online poker and online casino gaming are still shunned.
The process of legalization of sports betting in Virgina was far from straight forward. The bill which effectively allowed online sports betting came up for a lot of contention before it was finally passed in 2020. FanDuel seems to have captured the majority market here and early market penetration in 2021 has been an advantage for FanDuel in Virginia. There are currently no retail sports betting centers in Virginia, but the first of the kind is expected to be operational by 2023.
Online poker and online casino gaming are illegal in Montana as of now, but online sports betting was legalized in May of 2019. The state of Montana appointed a private company called IntraLot to manage and oversee operations of both online sports betting and land-based sports betting within the state. IntraLot received the contract for a period of seven years.
Even though online sports betting is legal, there is a substantial caveat. Residents are not able to place wagers on sporting events using their mobile devices. Even if you wish to place a bet online, you will need to present at licensed sports betting retail outlets where you can use dedicated online interfaces to place wagers on sporting events of your choice.
The State of Illinois does not allow online poker and online casino websites just like several other fellow US states. Online sports betting is allowed and it was legalized in March of 2020. Both land-based sports betting and online sports betting was made legal at the same time in 2020. The primary online sports betting website in Illinois is called BetRivers, but the likes of William Hill Sportsbook and several others have now followed in the path of BetRivers and offer services to the people of Illinois.
US States where only Land-based Sports Betting is Regulated
In the section above, we've addressed and briefly gone over every US State which currently allows online gambling in the form of (either one or more) online sports betting, online poker or online casino gaming.
However, we must also list certain US states where sports betting is legal and regulated, but only retail or land - based sports betting. In these states, you are not going to be able to legally place wagers on sporting events over a website or mobile app, but you can visit a sports betting retailer in person and place your bet. A few of the states that belong to this category are currently contemplating the legalization of online sports betting.
At the moment, the following US States allow retail sports betting only:
- New York
- Washington D.C.
- Arkansas
- Maryland
- Mississippi
- North Carolina
- New Mexico
US States where Sports Betting could soon be Legalized
Undeterred by the Supreme Court verdict that PASPA was unconstitutional, a handful of US states did not take action to get the ball rolling on legalization at that time. However, considering the amount of revenue other US States are able to generate by regulating and taxing gambling in its many forms, these states are now back to the drawing board to spec out phased legalization.
Sports betting in particular may soon be legal in the below US states:
- Missouri
- Kansas
- Massachusetts
- Maine
- California
- Florida
- Kentucky
US States where you can Legally Play Lottery Games
Regulated lottery, both online and retail, has been practiced in several US States much before the Supreme Court's PASPA verdict.
The below states offer legal lottery games which are operated either by the state Government of appointed private companies.
- Illinois - Lottery fans in Illinois can play all of the US' biggest and most popular lottery games in a legal and safe manner. Be it Mega Millions, Powerball, Lotto, etc.
- Michigan - Residents of Michigan can lawfully play certain lottery games hosted in Michigan such as scratch card games, keno games, and even nationwide lottery games such as Powerball and Mega Millions.
- Georgia - All lottery games within the jurisdiction of Georgia are managed and operated by a special organization called the Georgia Lottery Corporation. The Georgia Lottery Corporation offers a few authentic lottery games which include interactive Diggi Games. Residents can also play the big US lottery games like Powerball, Mega Millions and Fantasy 5.
- Kentucky - Kentucky based lottery players can play lottery and jackpot games form the comfort of their own homes. Kentucky legalized lottery games in 2016.
- New Hampshire - The New Hampshire Lottery has evolved substantially over the years. It has gone from having one game where tickets cost $3 a pop to offering multiple lotto games and scratch cards. Lottery sales add up to around $500 million in 2021 in New Hampshire.
- Pennsylvania - Online lottery in Pennsylvania was legalized in October of 2017. The Pennsylvania iLottery was formed to operate various lotto style games, scratch cards and instant win games.
Challenges along the Path to Legalization of Gambling in the US
The journey to legalization of online gambling in the US has been far from straight forward. Various challenges have been conquered along the way and many more are yet to be tackled. Let's take a look at some of the main challenges that hinders the legalization process.
A major force against the legalization of online gambling is one Mr. Sheldon Adelson. Adelson is the CEO of a Las Vegas based casino known as Las Vegas Sands. His motive to fight and keep online gambling illegal seems very clear and obvious to us, land - based casinos like his own may lose some market share if online gambling is legalized.
Unfortunately for the US online gambling market, Adelson seems to be a powerful lobbyist with plenty of connections higher up in the government, especially in the Trump administration. He fights against the legalization of online gambling using the pretense that online gambling would destroy US societies and result in tremendous gambling addiction at all levels.
Secondly, the US federal government has allowed US states the autonomy to legalize or illegalize online gambling at their own discretion. A few progressive states have taken advantage of these powers and used online gambling to generate lots of tax revenue which supports other pillars of society such as education and healthcare. However, several others have remained skeptical and seem to have a baseless belief that legalization will result in widespread gambling addiction that permeates across all socio-economic classes of their societies.
Thankfully, even the states that were hesitant to legalize online gambling now seem to be waking up to the truth, which is that not only will they be able to raise hundreds of millions of dollars in revenue, but their apocalyptic visions of residents becoming uncontrollable gambling zombies maybe too farfetched considering states where online gambling has been legalized are doing just fine.
Slowly but surely, online gambling will triumph and the process is already in motion at the majority of US States. Online gambling is the future of gambling and governments around the world should think about how to regulate it and benefit from it rather than go into complete denial mode.
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