The online casino industry has exploded in popularity over the course of the 21st century so far. Currently, the USA accounts for more than $11 billion of global iGaming trade, surpassed only by the UK. As one of the largest iGaming markets in the world, although online gambling is legal in the USA, the manner in which the industry is regulated varies by state.
While some states don’t allow online gambling at all, others have made it legal and separately regulate how it’s run. There’s also a third category of states that are considering legalizing or have already started the process. Between these differing approaches by each state, it can be tricky for players to navigate the legalities of online casinos in their region. To make it simpler, here’s an overview of some of the key states and where US online casino laws stand on the issue so far in 2024.
North Carolina’s Gray Area
North Carolina is a state that finds itself in something of a legal gray area when it comes to online gambling, according to Jamie Wright. In the state itself, online gambling isn’t regulated. As a result, there are currently no local platforms available to players. However, like many other states that don’t have access to local online gambling platforms, offshore sites make for an attractive option. This is because players can simply use them to bypass the lack of legalized online betting in their state.
This gray area stems from the fact that online gambling in states like North Carolina is technically still illegal. However, unlike most other laws, despite North Carolina not being able to have its own platforms, in most instances, players aren’t banned from using offshore sites since those sites operate outside the jurisdiction of the state in question. In cases where it is a minor crime to gamble online, penalties against them are virtually never enforced. US-registered online gaming platforms are therefore keen to have more states legalize the industry so players can use local sites instead.
States that have Legalized Online Gambling
For a long time, institutional gambling was synonymous with places like Las Vegas and Atlantic City. However, online wagering and casinos have revolutionized gambling and changed the game for where and how virtually any casino, card, table, and slot game can be accessed and played. The ever-growing popularity of online gambling means 2024 currently has five other states outside of Nevada that allow online gambling — namely Michigan, Pennsylvania, West Virginia, Colorado, and New Jersey.
Those states have taken the lead by recognizing the many economic benefits of legalizing online gambling. However, iGaming as an industry has many detractors too, making nationwide adoption of it an industry goal that still has a long way to go. The immense success of online gambling worldwide has prompted more states to consider legalizing it. That has led many other states to consider it seriously or have already commenced the legal process to make it happen.
States that are Currently Considering the Option of Legalizing Online Gambling
Many states have begun reassessing their stance on online gambling since the stimulus coffers are beginning to dry up from the forced shutdowns a few years ago. In that sense, online gambling offers massive incentives for states to legalize it since the industry can generate billions in new sources of tax revenue.
Some states, like Indiana, are likely to follow suit in due course. Indiana had a bill rejected by lawmakers in February 2024, with one of the reasons being that online casinos will kill the state’s physical casino businesses if it legalizes online gambling. Despite the bill’s failure, it’s expected that proponents of it will try to get it passed again next year.
Online gambling may still have a very small base in the US, but sports betting has been legal a while now and is available in many states across the country now, even when done online. More and more states appear to be interested in eventually legalizing the industry in their regions too. Indications show that states like California, Illinois, New York, and Massachusetts all appear to be making plans to bring in legislation that legalizes online gambling at some point.
However, in contrast, more than thirty states have introduced laws to regulate sports betting. The legal change that opened the door for states to individually determine how online gambling is handled was a change to how the Federal Wire Act was reinterpreted. There’s since been a huge uptick in states that legalized sports betting. It’s now also likely that many more states will eventually begin legalizing online gambling too. For now, what is uncertain is how long it will take other states to get on board with online gambling and actually pass the legislation required to make it legal.
The Tension Between State and Federal Law
The United States’ federated legal system can often make it confusing for people to understand which laws apply to a given industry. In that regard, the body of legislation that governs gambling at a federal level contains some overlap with how the state law regulates their own gambling laws.
However, since the reinterpreted provision of the Federal Wire Act allows states to regulate the specifics of online gambling, each state gets to decide if they want to legalize it or not. If a state allows online gambling, they are then also responsible for designing the regulatory framework that governs the industry in that state. While the general optics and best practices that have developed in the industry usually mean each state’s online gambling laws have similarities, they also each contain provisions that differ according to the individual concerns of each state.
As with any state and federal law that overlap in some manner, if there is any conflict between the two, the supremacy clause will generally kick in and give the federal law precedence. This means that states are generally free to regulate online gambling on their own terms. However, no provisions in the enacted regulations can conflict with any federal law that deals with the same issue as the provision in question.
States that Completely Ban Online Gambling
With gambling in general, Utah and Hawaii are the only two states that have the distinction of not allowing any form of it. Every other state allows traditional casino games, sport betting, horse racing, and lottery betting in various ways. When it comes to online gambling, though, the remaining states have proven to hold very different opinions on it.
While some states allow online gambling, others are very open to the idea. However, many states don’t allow online gambling in various forms. For example, it is illegal to place any bet online in states like Alabama, Kentucky, Idaho, California, Georgia, and Minnesota, just to name a few. It’s possible that many of these states may one day change direction in the future, but as of 2024, many of them are still ardently against the industry.
Overall, the fragmented and diverse manner in which online gambling is handled legislatively also differs in some stark ways among the ones that do allow it. For instance, while Nevada does allow online gambling, it’s unsurprisingly restrictive in the arena and does not allow online casinos. As the state that’s become synonymous with gambling and its famous casinos, it makes sense that allowing online casinos would pose a huge financial threat to Vegas’ most storied economic interests.
Conclusion
Online gambling remains a contentious industry, with many states having vastly opposing views on how it should be handled legally. There are currently six states that allow online gambling and a host of states that don’t for varying reasons.
Given the massive economic success of the iGaming industry worldwide, many other states are currently considering legalizing online gambling. Others have even begun the legal processes to take that step, making it likely that the online gambling footprint will continue to grow in the USA in coming years. Till then, players from states that don’t allow online gambling continue to turn to offshore platforms to fill that void.
