Any casino provider that can tap into the vast potential of the American market has created a winning formula. The challenge, of course, is to stand out in such a busy market and to do so while remaining compliant with the ever-changing laws and regulations that shape the US casino gaming market. Due to the sheer scope of the country and the way the regulations work, each state has developed its own laws.
As of early 2025, over two dozen American states have legalized sports betting. While that’s obviously a different market from casino gaming, it shows that there is a conversation to be had about the widespread legalization of gambling, specifically online casinos. The jewels in the crown and the states that gambling companies spend the most time lobbying for the legalization of gambling in include Texas and California.
Measuring Casino Popularity Via Alternate Providers
With only seven states allowing all types of online betting, there’s still an enormous scope for gambling companies to expand into the US market. However, for consumers who are not residing in one of these seven states, there are other options available. One of the most popular alternatives over the last five years has been sweepstakes casinos.
Sweepstakes in the East Bay have helped build a foundation for alternate payment providers to capitalize on the grey area within the US online casino market. Sweepstakes casinos do not face the same wrath or regulation as standard casinos.
They offer the same games and look identical to a traditional casino, but crucially, you do not need to use your money to play them. Instead, there are a range of site-specific currencies that can be obtained for free, so legally, sweepstakes are not considered gambling. They have proven to be a hit in regions where online casinos are forbidden.
Exploring The Legality Of US Online Casinos
We’ve already touched on the fact that seven US states allow online casino gaming.
New Jersey was the first to adapt their state-wide legislation in 2013. Over the last 12 years, the other six states that have joined this list are:
- Delaware
- West Virginia
- Pennsylvania
- Michigan
- Connecticut
- Rhode Island
Some gamers conflate the fact that over 30 states have legalized sports betting and automatically presume that they also offer online casinos.
Sportsbooks And Casino Gaming In The US
Many of the top casino providers in the US also offer extensive sportsbooks, which doesn’t help customers who believe that they go hand in hand. This year’s Super Bowl generated over $1bn in bets alone, with some analysts predicting it could be in the multibillions if black market bets were accurately recorded.
Some states are more anti-gambling than others though. For instance, Utah forbids any access to online casinos, state lotteries, or anything that could constitute a gambling market. California and Texas have a similar approach, but recent news suggests that Texas is softening its current hardline approach to online betting.
With so much of the state moving toward digital finance and fintech ideas, don’t be surprised to see Texas become one of the biggest states to change its standpoint on sports betting and casino gaming between now and 2030.
While this conversation has revolved around sports betting, it allows the online gambling market to get its foot in the door and lobby for broader laws, which opens the potential for online casino gaming to be given the same leeway at some point in the future.
States that have legalized sports betting and casino gaming almost exclusively started by allowing sports betting before passing subsequent legislation that resulted in the regulation and legalization of the entire industry within state lines. This could be what’s on the cards in the not-too-distant future for states that have only legalized sports betting so far.
The Pros And Cons Of Legalization
States that have managed to fend off the power of the gambling lobby in the US have done so by showcasing the harms of gambling and how it’s better to keep it illegal within state lines. The problem is that millions of people bet online, and there are more smartphones than people in the US, so it is not an effective way to protect those at risk and ultimately denies the state of any revenue from the industry.
Gambling has been part of the human condition for thousands of years, and if people want to play casino games, they will access it through sites that are operating outside the laws of the state. Many states have weighed the harms and decided to legalize it, knowing they can regulate it, tax the winnings and use the resulting taxes to improve local services.
Sure, they would rather not have their hand forced, but this approach ensures more gamblers are using properly managed sites, and allows them to manage the industry within their state lines. The money can be directed back into services that help people with gambling problems.
Conclusion
Unlike countries like England, where laws are applied nationwide, many of the powers that lie with regulators in the US are limited to the state level. Gambling is not the only law that falls into this classification; lawmakers at the state level are responsible for a wide range of areas.
When we ask whether online casinos are legal in the US, the answer is yes and no. The seven states we mentioned above have rigid frameworks within which companies must operate, whether they are casinos, lotteries or sports betting providers. It’s a question that doesn’t have a set answer.
Most states will simply fine people if they are caught gambling illegally, while others also threaten imprisonment. It’s likely that we will see this mindset change over the next five years, and more states will inevitably move towards online casino gaming. However, it takes time and often requires numerous votes before being legalized.
