The Growth of Online Gambling in the US by State
If you browse the Internet regularly, there’s a strong chance you’ve seen an advertisement for legal online gambling. The explanation is that iGaming is now legal in many US states.
The Supreme Court legalized sports betting in 2018, seven years after the Department of Justice authorized states to regulate online casino games. So far, 33 states permit sports betting while at least seven of them allow games of chance.
In this article, we’ll delve deeper into how different states regulate online gambling. Let’s get started.
New Jersey
New Jersey, under Governor Chris Christie, sponsored the bill that finally brought down PASPA Act in 2018. Garden State was fighting against the NCAA among other anti-gambling organizations in the lawsuit.
New Jersey legalized sports betting immediately after the landmark Supreme Court decision. Interestingly, Garden State had already authorized online casinos in 2013.
This means all forms of online gambling are now in New Jersey. The state licenses new operators through the NJ Department of Gaming Enforcement (NJDGE). This regulator has so far licensed 33 gambling sites.
Because of legalizing iGaming early on, NJ is one of the biggest gambling markets in the US. In 2022, Garden State generated $5.21 billion from its online gambling industry. Out of this money, the state kept $825m as taxable income.
Texas
When it comes to legal online gambling, Texas is the opposite of New Jersey. Lawmakers in the Lone State often fight to close down tribal casinos. And they make little effort to permit sports betting or online casinos.
To be clear, Texas permits certain forms of gambling. Casino games are allowed in three tribal casinos: Lucky Eagle, Naskila Gaming, and Speaking Rock Entertainment Center.
Texas also permits pari-mutuel sports betting and electronic bingo. It draws the line at iGaming. However, it does not prosecute people who choose to play slots or poker at the best online gambling Texas real money websites.
In all fairness, the Lone Star State has no authority over offshore casinos based in Curacao, Panama, or Costa Rica. Even if it tried to sue these operators, it wouldn’t succeed.
New York
New York legalized sports betting in 2019. However, it didn’t commercialize online betting until January 2022. The Empire State has so far licensed nine sportsbooks.
These bookmakers recorded $16.2 billion worth of sports bets last year. In turn, the state made $1 billion in tax revenue, an impressive record by all accounts. To be fair, NY taxes sportsbooks 51% of their income—much higher than the 13% NJ charges.
Interestingly, NY does not permit online casino games. It allows tribes to run land-based casinos on reserved land. But it’s yet to license casino sites. Similar to Texas, NY has no issues with its citizens when they gamble at offshore casinos. In fact, there are numerous casinos based in the Caribbean that openly accept New Yorkers.
Pennsylvania
Pennsylvania legalized online gambling in 2017. However, the state’s first iGaming company launched in 2019. Since then, Pennsylvania has legalized 18 mobile betting companies.
Similar to New York, PA takes a large percentage of betting companies’ money as tax. The Keystone State collects 55% of the income generated from slots and 16% of the gross income collected from table games.
Sports betting companies in PA part with 36% of their gross revenue as tax for the state. Overall, the Keystone State makes over $500m in annual revenue thanks to legal online gambling on sports.
On the other hand, residents in the state don’t need to visit New Jersey or New York to gamble legally. They can use local casinos and sportsbooks conveniently.
West Virginia
West Virginia was one of the first five states to legalize both sports betting and online casinos. The Mountain State welcomed its first gambling site in July 2020. Four more betting sites have since opened.
Last year, West Virginia generated $769 million from its online gambling revenue operations. This was a 17% increase compared to 2021, back when the country was struggling to eradicate a global pandemic.
Delaware
Delaware might be small in land area. But it was the first state in the US. Fine—that’s unrelated to online gambling. But get this. Delaware was the first state to license online casinos in 2012. In 2018, it also became the first to permit sports betting.
In other words, the Delaware is a state of firsts. It might not be as large as NJ or NY. But it makes decent money from online gambling. Last year, DE generated $973m from the industry, a 30% jump compared to the previous year.
Michigan
If you’re above 21 years in MI, you can play online slot games or bet on sports legally. The Great Lake State legalized iGaming in December 2019. In the next two years, MI legalized 14 online casinos. It plans to license up to 30 operators.
Although the Great Lake State legalized iGaming a bit later than NJ and PA, it now generates billions of dollars from the sector. The state generated $1.4 billion from legal online gambling in 2021. The income rose to $1.98 billion in 2022.
Nevada
Nevada is synonymous with gambling. It’s the entertainment capital of the world. And before 2018, Nevada was the only state where you could bet on sports legally.
Surprisingly, Desert State doesn’t permit online casino games of chance like slots, blackjack, and roulette. The state prohibits these games to avoid suppressing its brick-and-mortar casino empire.
With that in mind, Nevada allows mobile sports betting and online poker. Of course, accessing casino games is also fairly easy in the state. Thanks to its vibrant casino space, Nevada generates upwards of $10 billion in the gambling industry.
Rhode Island
On June 20, 2023, Rhode Island became the seventh state in the US to legalize online casinos. However, the state will welcome its first online casino in March 2024.
Rhode Island legalized sports betting in 2018. At the time, it was the only state that permitted mobile betting but not in-person sports gambling. Being the smallest state in the country, Rhode Island doesn’t make much money from the sector. However, it’s a significant amount. The state made $50m from legal sports betting in 2022.