The Slow Road to Online Casino Legalization in the US

The Post-PASPA Boom in Sports Betting

The 2018 U.S. Supreme Court decision to overturn the Professional and Amateur Sports Protection Act (PASPA) was pivotal.

This act had previously restricted sports betting primarily to Nevada. Since the decision, 38–40 states have legalized sports betting, with 31–32 offering mobile/online options. The rapid legalization has led to significant tax revenue, such as over $1.8 billion in a recent fiscal year, along with partnerships with major sports leagues.

Sports betting is seen as skill-based, aligning with America’s sports culture, making it a low-barrier expansion. In contrast, online casino games—including slots, blackjack, roulette, and other house-banked games—lacked any comparable federal trigger or cultural “halo.”

Even in states that quickly adopted sports betting, expanding to full iGaming has faced sustained resistance, resulting in only eight states currently offering regulated real-money online casinos. The states with legalized online casinos include:

• Connecticut
• Delaware
• Maine
• Michigan
• New Jersey
• Pennsylvania
• Rhode Island
• West Virginia

Legalizing online casinos in the United States is complex, with many challenges to overcome. However, with clever solutions and robust regulations, there is hope that online casinos can one day achieve the same level of acceptance as sports betting.

Why Online Casinos Face Challenges

iGaming, or online casinos, faces several challenges that slow its widespread acceptance.

1. Perceptions of Risk: Online casino games like slots and roulette are seen as higher-risk because they are fast-paced and luck-based, unlike the skill-based nature of sports betting. Legislators worry about addiction due to these games being available 24/7. Studies show that people who gamble on casino-style games can have different, often riskier gambling behaviors compared to sports bettors. For casino players, large sums of money spent can lead to problem gambling, while sports bettors are often linked to frequent betting and easy mobile access. Lawmakers often ask for strong measures to protect players, such as deposit limits and self-exclusion programs, which make regulation more complicated and slow down legalization.
2. Stakeholder Opposition: Traditional casinos and tribal gaming operators fear losing customers to online platforms, leading them to push back against iGaming. Land-based casinos worry about losing foot traffic and jobs, and tribal gaming operators often have agreements giving them exclusive rights or revenue protections. They may oppose or demand conditions for online casino legalization to protect their interests. This opposition slows down efforts in potential markets, and online platforms like DraftKings and FanDuel must navigate these interests, which can lead to higher taxes or limited licenses.
3. Regulatory Hurdles and Politics: Setting up iGaming involves creating complex rules to ensure fair play and player protection, sparking debates about taxes and ethics. Although states that have legalized iGaming often earn significantly more revenue than from sports betting, many move cautiously. States may consider iGaming when facing budget shortfalls, but without strong evidence of manageable social costs, lawmakers often prefer to start with sports betting and delay or study iGaming. Recent bills in states like New York and Illinois have moved slowly or required long timelines.
4. Economic Considerations: States with legal online casinos, like New Jersey and Pennsylvania, often earn more from them compared to sports betting. While sports betting had few hurdles initially, iGaming requires teamwork among lawmakers, casinos, and the public. Effective progress can involve pilot programs with strong responsible gambling checks, sharing data from successful markets, negotiating with tribes and casinos, and public education about the benefits of regulated gaming.
5. Cultural Perceptions: While sports betting is widely accepted, online casinos still carry a stigma that links them more with addiction than entertainment. Until economic needs, public opinion, and evidence of social safety align better, the expansion of iGaming will be slow and careful.

Unlike the rapid spread of sports betting after a key federal decision, legalizing online casinos requires balancing economic benefits with the real risks involved.

iGaming: Looking to the Future

The future of online casinos (iGaming) in the United States is expected to grow slowly, state by state, instead of expanding quickly across the country as sports betting did after the 2018 PASPA decision. With only eight states having legalized online casinos so far, there is a lot of room to add more.

This number is much smaller compared to the roughly 39 states (plus D.C.) that allow legal sports betting. The spread of online casinos will likely be slow, driven by the need for more money but held back by politics, opposition from some groups, and careful decision-making.

Short-Term Outlook (2026–2027): Quiet but Active Times

Experts describe 2026 as a quiet year for new online casino approvals. Although there are bills in states like Massachusetts, Virginia, and New York, not many of them are expected to become law by the end of 2026.

Maine’s recent success was unusual since it focused on tribal interests and passed without the governor’s signature. Many challenges, like concerns during election years, union and labor opposition (particularly in New York), and difficult negotiations, mean most progress will be limited to discussions and planning rather than new laws.

Some predict the next significant changes might not happen until 2027, with only 1 or 2 new states likely to join by then.

Medium- to Long-Term Outlook (2028+): Slow But Steady Growth

Over the next 3–5 years, more states are expected to allow online casinos, potentially increasing the total to 10–12 by 2030.

This growth won’t be as fast as sports betting because online casinos face more resistance and lack a big national push. States like Nebraska, Maryland, Wyoming, Virginia, and Ohio, which already have sports betting, are seen as future candidates for iGaming because it could be a profitable next step.

Key Reasons for Future Growth:

• Proven Success in Revenue: In states where online casinos are legal, they often bring in more tax money than sports betting alone. States with budget problems see online casinos as a reliable way to fund important services like education and public infrastructure.
• Pressure to Control Unregulated Markets: Efforts to limit illegal gambling activities highlight the benefits of bringing them into a regulated and taxed system.
• Research and Data: New information shows that responsible gaming tools can help reduce risks, making lawmakers more comfortable with expanding iGaming.

Challenges That Keep Growth Slow:

• Strong opposition from Native American tribes and land-based casinos due to worries about losing business.
• Concerns about gambling addiction are linked to constant availability and fast-paced games.
• Complex politics, including high tax proposals and lengthy negotiations.

Overall Direction For The Online Casino Industry

Existing online casino markets will keep improving and coming up with new ideas, like special apps and games, while also focusing on responsible gaming technology.

The United States will have a mixed map of legal and illegal online gambling, but overall, the industry is growing, with online casinos playing an important role in the gambling industry’s success. More states will likely legalize online casino games, but progress will be slow and careful, depending on state laws, financial needs, and agreements between different groups. Unlike the fast growth of sports betting, the future of online casinos is about steady expansion through careful negotiation.

Success in the current eight states will serve as a strong example for others to follow, but only when revenue potential and risk management are balanced.