As more states in the United States successively open up sports betting, the world's leading online betting platforms are also turning their attention to the more promising online casino market. Although legal sports betting is developing rapidly, the legalization of online casinos is still relatively slow, with only a few states truly achieving full liberalization.
Are online casinos legal in the United States?
By 2025, nearly 40 states in the United States will have opened legal sports betting, but very few states actually allow online casino operations. The legalization process is still limited by a combination of state regulation, law, interest group games, and public attitudes.
The development history of online casinos in the United States can be traced back to the 1990s and has experienced many twists and turns over the following decades:
Initial Stage (1990s): In 1994, Antigua and Barbuda were the first to issue online casino licenses, the first online casino InterCasino appeared in 1996, and the first online poker room Planet Poker launched in 1998.
Frequent Legal Challenges (Early 2000s): Online gambling became popular in 2001, but the introduction of the Unlawful Internet Gambling Enforcement Act (UIGEA) in 2006 severely hit the market, causing many platforms to exit the United States.
Reform and Restart (2010s): In 2011, the U.S. Department of Justice revised its interpretation of the Federal Wire Act, paving the way for states to independently legalize non-sports online gambling. That same year, the "Black Friday" event shook the entire online poker industry. In 2013, New Jersey, Nevada, and Delaware were the first states to implement online gambling legalization.
Entering the Fast Lane (2020s): Since the Supreme Court overturned PASPA in 2018, sports betting has been fully legalized, and states have also begun to cautiously advance online casino legislation. Since 2021, Michigan, Connecticut, and Pennsylvania have joined the online casino ranks.
States where online casinos are currently legalized
The following six states currently fully open real money online casinos and have established their own regulatory systems:
Connecticut: Legal since October 2021, the market is dominated by two tribal casinos (DraftKings and FanDuel), regulated by the State Department of Consumer Protection, with a starting tax rate of 18%.
Delaware: The earliest state in the U.S. to legalize online casinos (2013), gambling revenue is managed by the state lottery department. The tax rate for video lottery games is as high as 42.5%.
Michigan: Officially launched online casinos in 2021, regulated by the Gaming Control Board, implementing a progressive tax system, up to 28%. It is one of the three iGaming markets in the U.S. with revenue exceeding $5 billion.
New Jersey: Online gambling was legalized in 2013, with the most diverse gaming platforms and operators, a dual regulatory system, and a tax rate of 15% of total gaming revenue plus additional surtax.
Pennsylvania: Legislation in 2017, launched in 2019, offers up to 54% tax on slot machines, one of the highest revenue states. Online gambling is regulated by the state Gaming Control Board.
West Virginia: Legislation in 2019, launched in 2020, with a relatively low tax rate of only 15%. Online casino licenses are tied to physical casinos, with regulatory authority belonging to the state lottery commission.
In addition, Rhode Island introduced live dealer games in 2024, the latest state to join the legal ranks. Although the types of games are limited, it is expected to expand in the future.
States likely to legalize online casinos in the future
New York
As the state with the highest sports betting revenue in the U.S., the development prospects of online casinos in New York are highly anticipated. A bill proposed in 2024 to legalize online poker, but the process is hindered by labor organizations and regulatory delays. 2025 is expected to be a critical juncture.
Indiana
Although a related bill was promoted in 2023, legislation was paused due to concerns about corruption cases involving former legislators and the impact on physical casinos. It may re-enter the legislative agenda in 2025.
Maryland
Maryland, bordering Pennsylvania, originally had good momentum in advancing iGaming, but due to public concerns about gambling issues and constitutional requirements for a statewide referendum, the earliest legalization time was postponed to after 2027.
Alternative forms: Sweepstakes casinos
In most states that have not yet opened online casinos, sweepstakes casinos have become a legal alternative. These casinos avoid gambling regulations by offering free participation opportunities and are widespread across the U.S.
Sweepstakes casino laws vary by state, but generally require:
Must be free to participate;
Rules must be public;
Prizes must not mislead consumers;
Some states have additional restrictions on alcohol, tobacco, and travel prizes;
Many states require advance registration, disclosure of prize value, and odds of winning.
It is particularly noteworthy that Washington state currently neither allows online casinos nor supports sweepstakes casinos, making it the only state in the nation that does not allow any form of online gambling.
Conclusion
Although the process of legalizing online casinos in the United States is still fragmented and slow, technological progress, user habits, and accumulated regulatory experience are gradually paving the way for more states to open up such gambling. Over the next decade, the "map" of the U.S. online casino market may see further expansion, worth close attention.
