Current State of US Online Casino Gambling Law
The global online gambling industry is worth millions, but the United States of America has been unable to grab its rightful share because of the Unlawful Internet Gambling Enforcement Act (UIGEA), which was passed into law in 2006. However, the US legal scenario has undergone several changes, and today, individual states have the freedom to create gambling laws of their own.
State-level gambling laws continue to change even as we write. But irrespective of the legal situation in your state, you will always find no-deposit USA online casinos allowing players to play and win real money.
Meanwhile, let us have a look at the latest online gambling laws in the US.
Important Gambling Laws in the US
US lawmakers have passed several laws to regulate gambling. As most of these laws were passed before the arrival of the Internet, they lack the required provisions to regulate online gambling.
The following is a brief introduction to these laws:
Federal Wire Act (1961)
Passed along with certain other laws such as the Travel Act, the Federal Wire Act defined gambling as an organized event. It included a section that penalized any individual who used wire services to transfer funds for gambling purposes with prison time of up to two years and/or a hefty fine.
This was the section the US government used to regulate online gambling. An attempt was made in 2014 to pass the Federal Wire Act in a different form—Restoration of America’’s Wire Act (RAWA).
Interstate Transportation of Wagering Paraphernalia Act
Passed in 1961 as a complement to the Wire Act, the Interstate Transportation of Wagering Paraphernalia Act attempted to plug certain loopholes related indirectly to gambling. It criminalized the transportation of any tickets, certificates, records, paraphernalia, bills, slip tokens, and other items of the kind for the purpose of wagering or bookmaking.
Unlawful Internet Gambling Enforcement Act (2006)
The UIGEA had the greatest impact on the online gambling industry in the US because of its attempts to regulate not only gamblers but also operators of online gambling sites. The law sought to accomplish this by targeting banks, payment processors, and financial institutions.
The passing of the UIGEA led to the mass exodus of several payment processors, operators of online gambling sites, and software providers from the US market. A few providers including Betsoft, Real Time Gaming (RTG), and others, however, stayed back in the US market and looked for ways to dodge the laws and provide online casino gaming services to US residents.
Professional and Amateur Sports Protection Act (PASPA)
Passed in 1992, the purpose of this law was to criminalize sports betting. US law-enforcement agencies used this law along with the Wire Act to ban sports bets placed via wire transfer. The law had no power over certain forms of betting such as dog racing, state-operated lotteries in Montana, Delaware, and Oregon, and pari-mutuel horse racing.
Shortly after it was passed, individual states that had legalized sports betting were given a grace period to make the required legal changes and comply with the PASPA. However, New Jersey filed a lawsuit against the PASPA on grounds that it was unconstitutional.
As a result, a Supreme Court ruling of 2018 pulled down the PASPA and declared that betting on sports was no longer a banned activity. This opened a floodgate of opportunities for individual US states, enabling them to legalize sports betting.
Today, several US states have legalized sports betting and many are on the way to legalize online casinos as well.
Restoration of America’’s Wire Act (RAWA)
Introduced in 2014 by Senators Jason Chaffetz and Lindsey Graham, the RAWA attempted to re-introduce the Wire Act in a different form.
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.
If passed into law, the RAWA would have been disastrous for the regulated online gambling markets of Delaware, New Jersey, and Nevada. Moreover, it would have criminalized the sale of lottery tickets online while exempting fantasy sports wagering and online horse betting.
US States That Have Legalized Online Gambling
Let us first talk about US states that have banned gambling in all its form. These are the states of Hawaii and Utah.
Both Hawaii and Utah banned all forms of land-based gambling long back, but neither of them has passed separate laws that ban online gambling.
The reasons for the ban on gambling are different in each state, but the ban on gambling is complete. Utah is heavily populated with Mormons and any form of gambling goes against their religious beliefs. On the other hand, most of the residents of Hawaii feel that gambling harms young people and creates disruptive changes in their lifestyles.
Many of the remaining US states have legalized one or more of the following—online casinos, online sports betting, and online poker. A few have already launched online sportsbooks and mobile sports betting apps, and some are planning to start with legal sports betting as early as possible.
Currently, the states of Michigan, Pennsylvania, and New Jersey offer online poker, online sports betting, as well as online casino gaming.
The following is the current status of online gambling in each US state.
New Jersey
Widely acclaimed as the largest online gambling market in the US, New Jersey’’s online gambling industry is worth $225 million per annum. The New Jersey Division of Gaming Enforcement (NJDGE) is the body that regulates all forms of gambling activities in the state.
NJ was the only US state to file a lawsuit against the PASPA on grounds that it was unconstitutional. Today, the state offers several forms of legalized online gambling services. NJ is home to 15 licensed poker rooms, sportsbooks, and online casinos.
Pennsylvania
After the US Supreme Court ruling of 2018 pulled down the PASPA, Pennsylvania legalized several forms of online gambling. The state has been granting licenses for online poker rooms, online casinos, and online sportsbooks since 2019. The gambling regulator in Pennsylvania is the Pennsylvania Gaming Control Board.
In May 2019, Pennsylvania launched online sportsbooks; and in July 2019, it launched online casinos. Later in 2019, it opened its first licensed online poker room.
West Virginia
West Virginia was another US state to legalize online gambling immediately after the Supreme Court overruled the PASPA in 2018. In 2019, the state passed its West Virginia Lottery Interactive Wagering Act. The online gambling regulator in West Virginia is the West Virginia Lottery.
Although it formally legalized online sports betting and launched BetLucky in December 2018, it had to shut down the online sportsbook within a month. Two other sports betting operations that shut down shortly after they launched in the state were Wheeling Island and Mardi Gras Casino.
Pennsylvania then created a new law called the West Virginia Lottery Interactive Wagering Act. As a result of this law, residents of Pennsylvania can legally bet on sports at DraftKings Sportsbook and FanDuel Sportsbook today.
In 2019, West Virginia became the fifth US state to legalize online casino gaming. In July 2020, the first licensed online casino went live in the state.
In March 2019, West Virginia legalized online casino gaming. Moreover, online poker apps are expected to go live all over the state by 2021.
Delaware
All forms of online gambling are legal in Delaware.
Although it was the first US state to legalize sports betting after the Supreme Court ruling of 2018 overthrew the PASPA, it had legalized online poker and online casinos a long time ago.
In 2012, Delaware became the first US state to legalize online gambling and launch racinos. The very next year, it legalized online poker. Ever since 2015, the state has been offering online poker through a partnership deal with the World Series of Poker (WSOP).
Michigan
Michigan legalized all forms of online gambling through the passage of the Lawful Internet Gaming Act on December 20, 2019. In March 2020, the state launched its first retail sportsbook, the online version of which went live in January 2021.
The state’’s first online casino went live in January 2021, and its first online poker room is expected to be launched soon.
Nevada
Online sports betting has been legal in Nevada right from 2010, long before the Supreme Court overthrew the PASPA in 2018. Initially, players had to personally visit the land-based casino to create an online or mobile sportsbook account. But today, residents can register a new account on their PCs or mobile devices.
Nevada doesn’’t offer any online casino because of its thriving land-based casinos, but the state had licensed online poker way back in April 2013.
Indiana
Online, retail, and mobile sports betting became legal in Indiana in 2019. Today, residents can place sports bets legally at FanDuel, Unibet, BetRivers, and DraftKings.
However, online poker and online casino gaming continue to remain illegal in the state.
New Hampshire
In December 2019, New Hampshire legalized online sportsbooks. DraftKings, the state’’s first online sports betting site, went live in January 2020. However, the state doesn’’t appear to have any intention of legalizing online poker and online casino gaming.
Iowa
Online sports betting became legal in Iowa in 2019, and the state launched its first online sportsbook the same year. If you visit Iowa today, you will find several legal retail and online sportsbooks.
Initially, Iowa did not permit its residents to open sports betting accounts on their mobile devices or PCs. Instead, residents had to personally visit the online or mobile sportsbook’’s land-based partner to create an account. But today, residents can register on PCs, smartphones, or tablets.
Iowa is home to several reputed online sportsbooks like Pointsbet, DraftKings, and William Hill. So far, the state hasn’’t regulated online poker and online casino gaming.
Colorado
In November 2019, Colorado residents voted in favor of legalizing sports betting in the state. As a result, the state’’s first online sports betting site went live in May 2020.
However, neither online poker nor online casino gaming is legal in Colorado at present. Despite the lack of legislation, the majority of the state’’s land-based casinos have applied for online casino gaming licenses. Each license costs only $2000 in the state.
Oregon
Oregon was the first US state to follow in the footsteps of Nevada and offer retail sports betting services to its residents. Therefore, the state lost no time in legalizing online sportsbooks in October 2019, shortly after the Supreme Court judgment against the PASPA.
Today, Oregon is home to legal retail as well as online sportsbooks. But the state is yet to legalize online casino gaming and online poker.
Rhode Island
Like most US states, Rhode Island was quick to legalize online sportsbooks but has remained silent about the legalization of online poker rooms and online casinos.
In 2018, sports betting became legal in Rhode Island and residents could bet on sports on their mobile devices. Rhode Island offers legal sports betting services at Twin River Tiverton and Twin River casino.
As much as 51% of the total revenue obtained through sports betting activities goes into the state coffers. Casinos can keep only 17% of the revenue.
Tennessee
In April 2019, online sports betting became legal in Tennessee, and in November 2020, the state’’s first legal online sportsbook went live. Interestingly, Tennessee doesn’’t offer any retail sports betting services.
Tennessee has still not legalized online poker rooms or online casinos.
Virginia
The residents of Virginia can legally bet on sports online and via mobile sports betting apps. However, online poker rooms and online casinos are still illegal.
In April 2020, Ralph Northam, the governor of Virginia, received the first bill to legalize online sports betting. The bill had to undergo several rounds of discussions and debates before Virginia legislators finally legalized online sports betting.
Virginia’s first licensed online sportsbook FanDuel went live in January 2021. The state is expected to launch its retail sports betting services by 2023.
Montana
In May 2019, Montana legalized retail and online sports betting. The state’’s first licensed online sportsbook went live in March 2020. IntraLot manages all retail and online sports betting services within Montana. The state has commissioned the company to do so for the next seven years.
Mobile sports betting services, however, are highly limited in Montana. Residents can place sports bets on their mobile devices only if they are within the properties of licensed taverns or lottery retailers.
Online poker rooms and online casino gaming continue to remain illegal in Montana.
Illinois
In March 2020, Illinois legalized retail as well as online sports betting. The state’’s first licensed online sports betting site BetRivers went live in June 2020.
Five other sports betting sites including William Hill Sportsbook followed in the footsteps of BetRivers. William Hill went live in Illinois on September 15, 2020.
But Illinois still has no plans to legalize online poker and online casinos.
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US States With Licensed Retail Sportsbooks
So far, we have spoken about US states that have legalized one or more of the following gambling activities—online casinos, online poker, and online sports betting.
This section is devoted to US states that have legalized only retail sports betting. If you visit these states, you won’’t find any online sportsbooks or mobile sports betting apps. However, these states may legalize online sports betting at any time.
The following is a list of states with retail sports betting services:
- Mississippi
- Arkansas
- New York
- Washington D.C.
- North Carolina
- New Mexico
- Maryland
US States That May Legalize Online/Retail Sports Betting
Despite the Supreme Court ruling of 2018, which overthrew the PASPA and gave states the freedom to legalize online gambling, a few US states haven’’t legalized retail sports betting. Looking at the brighter side of things, however, these states are planning to legalize sports betting soon.
The following is a list of such states:
- Maine
- Florida
- California
- Kentucky
- Missouri
- Massachusetts
- Kansas
US States That Have Legalized Online Lotteries
Online lottery gaming is an online gambling activity that has been legal in a few US states even before the Supreme Court ruled against the PASPA in 2018.
The following is a list of US states that run lottery games. These lottery games belong either to the government or to private companies or agencies:
- Illinois – If you are a lottery enthusiast, you can play lottery games like Powerball, Mega Millions, Lotto, instant games, and daily lottery games legally in Illinois.
- Michigan – This US state is the home of lottery games like electronic scratch cards, instant keno, Mega Millions, Powerball, Fantasy 5, and Lotto 47.
- Georgia – The Georgia Lottery Corporation is in charge of lottery gaming within the state. It provides unique lottery games like the interactive Diggi Games. You can also try your luck on lottery games and instant games like Keno, Powerball, Mega Millions, and Fantasy 5.
- Kentucky – As the state legalized lottery games in 2016, its residents can play lottery games online. These games include daily lottery games and jackpot games.
- New Hampshire – This US state launched its lottery game on September 20, 2018.
- Pennsylvania – The Pennsylvania iLottery runs a wide range of lottery games and instant win games including online scratchcards. The state passed a bill to legalize online lottery games in October 2017.
Obstacles to US Online Gambling Legalization
The path to the legalization of online gambling in the US has never been smooth. On the other hand, it is full of hurdles. Here is a list of obstacles that prevent the legalization of online gambling in the US.
One of the major obstacles to online gambling legalization at the state as well as federal levels is casino billionaire Sheldon Adelson. The CEO of Las Vegas Sands, Adelson has, for a long time, been one of the loudest voices against online gambling legalization in the US.
Adelson’’s ability to influence and shape legal opinions against online gambling is remarkable as he is a Republican who has contributed heavily to former US President Donald Trump’’s presidential campaign. He played a major role in reversing a policy and getting Trump’’s administration to issue a powerful legal opinion against online gambling. The fact that he could do this right in the middle of a government shutdown is quite impressive.
Why is Sheldon Adelson against the legalization of online gambling? Adelson feels that the legalization of online casino gaming in the US will sound the death knell of his land-based casino empire. But he objects to online casino gambling on grounds that it is dangerous to society and will lead to problem gambling and addiction to gambling.
Another huge obstacle to online gambling legalization in the US is the fact that the federal government has given states the freedom to legalize and regulate gambling. States take a long time to legalize online gambling as they have to first ensure that online gambling legalization benefits the state as well as its residents. This is a time-consuming process.
Despite all these obstacles, legalized online gambling is fast becoming a reality in the US. The legal machinery is slow, but several states have already legalized all or a few forms of online gambling, and others are on the way to doing so.
Meanwhile, you can play at any one of the online casinos that accept US players. Most US-friendly online casinos operate on the Real Time Gaming (RTG) software platform. If you looking for the best online casinos for US players, we invite you to browse our lists of best RTG no deposit bonuses and pick the one you like best.
The number of US states legalizing online gambling is on the rise. As a result of favorable state-level online gambling laws, reputed software providers are returning to the US market. We hope that US players will soon be able to play all those games that are now available only in regulated markets across the world.
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Written by John Holmes 