Legalisation of Gaming in the US: Wagering in Different States

How the US Gambling Market Works

The sector’s regulation is built on the principle of decentralisation. There is no comprehensive federal legislation that would precisely define things that can and cannot be done.

After the ban on sports betting was lifted in 2018 (the Resolution of the Supreme Court in Murphy v. NCAA), each state gained the right to independently decide which types of gambling to allow and in what format.

All this makes the American market highly fragmented. Rules, tax rates, and the range of available services vary depending on the jurisdiction. Some regions fully legalise land-based and online entertainment, while others strictly prohibit the placement of bets.

Core Gambling Verticals

The regulation is built around 3 key areas:

1. Offline casinos. These are classic venues, including commercial and tribal ones.
2. Bookmaking. Wagering may be allowed in land-based locations and through mobile apps.
3. iGaming. This includes digital slots, lotteries, poker, and other virtual products.

Each of these areas is regulated separately. For example, one state may only permit bookmaker activity, another may only allow the existence of casinos, and a third may consider all kinds of entertainment for money legitimate.

Sportsbooks are the most dynamic and profitable sector. In some form (retail, online, or mobile), it has already been legalised by 39 states, and soon, they will be joined by more jurisdictions.

Offline casinos are the second popular format. The work of gambling halls is permitted in the majority of states through commercial licenсes.

Tribal establishments (Class II/Class III) are located on Indian lands. Based on agreements, entrepreneurs can open bingo rooms or fully functional casinos. Their operation is regulated by the IGRA and NIGC. It is worth noting that business owners receive subsidised assistance from local budgets.

The social gaming segment is rapidly developing in the US. Since such websites do not involve real money, they are not subject to certification. However, their income is taxed upon conversion and withdrawal of winnings.

Key Control Authorities

Let us consider the powers that various agencies have:

1. In-house commissions. They issue licences, collect income data, verify compliance, and investigate incidents. Examples of such organisations include the Nevada Gaming Control Board, the New Jersey Division of Gaming Enforcement, and many others.
2. Tribal committees and the NIGC. They monitor betting on Indian lands, coordinate local audits, monitor adherence to the IGRA, etc.
3. Local Commissions on Lotteries and Racing. Their responsibilities include the regulation of raffles, bids on the contests on the hippodrome, and certain types of instant entertainment.
4. Financial regulators and law enforcement. They monitor compliance with KYC/AML requirements, security of payment systems, and fraud prevention.

Why There Are Differences Between the States

In the US, each jurisdiction has unique rules based on its history, economy, culture, and political environment.

Historical Features

The development of gambling in the country’s regions has been quite different.

In territories like Nevada and New Jersey, casinos have remained an important part of the economy for decades.

In other states (such as Utah or Hawaii), local communities adhere to conservative traditions, and any attempts to legalise the casino market cause strong public resistance.

Politics and Popular Opinion

Each region has its gaming culture and the attitude of lawmakers. Therefore, the validation of casinos and bookmaking activities is discussed not only in terms of revenue, but also given the social risks.

Governance and Taxes

States want to control the number of permits issued, levies, and other aspects. In practice, it turns into complex legislative work that takes into account the opinions of all market participants and the real benefits to the country.

Economic Incentives

The gambling industry collects tax revenues and creates jobs. Therefore, many jurisdictions view it as an attractive business model and decide to introduce different fiscal rates and requirements for the licensees.

How Much Profit Does the US Market Generate

According to the American Gaming Association (AGA):

• $72.04 billion was received from offline and online entertainment in 2024 (a 7.5% increase over 2023);
• 28 of 38 states set annual records for commercial revenues;
• $15.91 billion was collected in taxes.

The AGA press release noted that the country’s casino industry achieved its highest profitability level in 2024 for the fourth consecutive year, thanks in part to significant growth in such niches as iGaming and mobile sportsbook.

In 2024, revenues from table solutions and slot machines increased by 1% to $49.89 billion in 492 commercial wagering establishments nationwide.

The virtual gaming segment also continued its strong growth in 2024. Its total income reached $8.41 billion, which is 28.7% more than the year before. This amount includes $26.3 million in proceeds from the Rhode Island market, where digital casinos and betting portals were only legalised in March 2024.

Jurisdictions with a Full-Fledged Vertical

By the end of 2025, only a few US states will have formed a developed entertainment ecosystem that combines platforms with slots, online poker, and mobile sportsbook. These regions have mature regulations, a sustainable tax model, and a large number of operators who work there.

New Jersey

It was one of the first to legalise virtual betting. Digital casinos were launched here on November 21, 2013, and poker platforms — 4 days later.

Today, the jurisdiction is home to many gaming companies. Local laws permit sub-brands (collaborations between interactive portals and land-based locations in Atlantic City).

By the end of 2024, the iGaming vertical's revenue was $2.4 million, the second-highest figure in the American industry.

The biggest earnings were received by:

• DraftKings;
• FanDuel;
• BetMGM.

Pennsylvania

This is the largest and most technologically mature entertainment market in the US. It has rather heavy regulations under the auspices of the Pennsylvania Gaming Control Board and high tax rates. Despite this, the state has demonstrated record profits and steady growth.

In 2017, Pennsylvania adopted the law legalising the main types of entertainment for money. Interest in the territory was enormous, as it became the first major wagering region with a population of over 12 million people.

Today, it is considered a mature market with dozens of licensed platforms, high competition, and large investments.

The following companies work here:

• PokerStars;
• BetMGM;
• IGT;
• NetEnt;
• Light & Wonder, and other brands.

The state has the highest tax rates. The combined levy on the income from online slots is 54%, and the cost of a licence can exceed $10 million (depending on the iGaming segment).

Michigan

This is one of the few regions that simultaneously legalised all key entertainment verticals.

Today, the jurisdiction has balanced legislation, and there are numerous international operators working there. In terms of income, the state consistently ranks in the top 3, competing only with New Jersey and Pennsylvania.

Michigan is a member of the Interstate Poker Agreement (MSIGA), which allows it to share player pools with New Jersey, Nevada, and Delaware.

The region’s unique feature is the presence of sub-brands (skins). These companies operate under Detroit or tribal permits. Each land-based establishment can collaborate with multiple online platforms, making the market diverse and competitive.

West Virginia

It became the fourth US state to fully legalise the iGaming sector.

Today, the jurisdiction offers a flexible fiscal system, moderate licence fees, and predictable regulation. It lacks excessive bureaucratic barriers, which attracts large investors.

FanDuel, BetMGM, Caesars, Novomatic, and other brands provide their services in the region. The WSOP has held the leadership in the poker segment for many years.

The iGaming niche generates tens of millions of dollars annually in taxes and fees. This is a significant amount of money for a state with a small population (less than 2 million people). The funds are distributed for education, infrastructure, and local social programs.

Connecticut

The jurisdiction is a unique example of the entertainment industry’s development in the US. The digital sector here is based not on commercial brands, but on the region’s partnerships with several sovereign tribes.

Today, 3 key companies work in the market:

1. Mashantucket Pequot Tribal Nation. It cooperated with DraftKings. Together, they launched a platform that offers classic products, card games, and sportsbook options.
2. Mohegan Tribe. FanDuel is a key partner of Mohegan Sun (the largest land-based casino chain on the East Coast). They own several websites with wagering solutions and slot machines.
3. Connecticut Lottery Corporation. Currently, the organisation is authorised to offer only bets on various competitions (in offline locations and through mobile apps).

Despite the jurisdiction’s small size, it boasts high community engagement and a steady increase in the revenue of entrepreneurs.

Delaware

Unlike most territories, where there are dozens of commercial brands in the market, the region has a single state model.

Key management features are given to the Delaware Lottery, the sole license holder, overseeing all digital operations. The provider collaborates with technology partners (888 Holdings and BetRivers), who are responsible for the functionality of entertainment platforms.

Rhode Island

In June 2023, the jurisdiction passed an iGaming market law. It became the seventh US state to legalise online casinos, poker, and betting.

However, Rhode Island is distinguished by a strong monopoly. The right to own virtual portals belongs to only one operator — Bally's Corporation.

The corporation also has two land-based casinos:

• Bally's Twin River Lincoln Casino Resort;
• Bally's Tiverton Casino & Hotel.

The Rhode Island Lottery oversees the gambling industry. The department ensures the timely payment of taxes/licence fees and resolves disputes between players or companies. It also introduces RG mechanisms.

Betting Market

Approximately 7 years ago, the US Supreme Court in Murphy v. NCAA overturned the federal ban on sports betting. Subsequently, each state was free to decide whether to legalise sports betting.

As of early 2025, balanced legislation is in effect in 39 states and the District of Columbia federal ban. More than 30 jurisdictions offer mobile and online betting, apart from land-based locations and sports bars.

The Industry’s Profitability

According to the American Gaming Association:

• In 2024, the total volume of accepted bets in the US exceeded $149 billion, almost double the rate from 2020.
• GGR was $13.7 billion, 20% more than in 2023.
• Tax revenues exceeded $2.8 billion. This money was directed to educational programs, infrastructure projects, and responsible gaming funds.

American betting is characterised by strong seasonal dynamics. The NFL is the main market driver. In the fall and winter, bookmakers' lines become more frequent, the number of live bids increases, and monthly audience activity indicators break records.

In the spring, the attention of players is traditionally drawn to the NBA and NCAA March Madness. Summer is a quiet period when everyone is preparing for new achievements.

FanDuel and DraftKings control a large portion of the wagering industry. Their shares vary in different reports, but together, they hold approximately 60–70% of the market.

Main Types of Regulation

Let us consider the approaches to sports betting management used in the US.

Open Competition Environment

Many operators receive licences. Suppliers independently launch startups, trying to provide the best product quality, marketing and bonus policies, as well as live entertainment.

Colorado has become rather progressive in the field of online wagering. Local authorities offer a variety of permits and low entry barriers. The niche itself is characterised by processability and a high level of content development.

At the beginning of the year, more than 25 operators were allowed to accept sports bets online. These include well-known international bookmakers and local operators.

The list of markets with open competition also includes Indiana, Arizona, Iowa, Tennessee, and New Jersey.

Affiliate (Casino-Linked) Model

This is a system in which digital bookmakers cannot work independently. To become part of the industry, they must conclude an agreement with a certified land-based establishment, tribe, or the region’s gaming facility.

This approach has been implemented in Illinois, Louisiana, Mississippi, Ohio, Massachusetts, and Maryland.

For example, in Illinois, entrepreneurs are closely tied to offline locations. Betting permits (master licences) are initially granted to casinos, racetracks, and stadiums, and online services can be provided through them.

The cost of a document is approximately $10 million, while skin certificates cost $5 million each.

Limited Licensing Model

In this case, the state deliberately restricts the number of operators, imposes rigorous requirements on the applicants, and gradually launches the market. This approach ensures a high level of control and protects local interests.

Jurisdictions with limited licensing include:

• New York;
• Arkansas;
• North Carolina;
• Washington.

Thus, in New York, permits are issued by tender. Currently, the government has held only one such competition, and only 9 online brands received certificates (FanDuel, DraftKings, Caesars, and other major companies).

The state has some of the highest tax rates in the US. The GGR levy is 51%.

Hybrid Models

This is a combination of different approaches. Some bookmakers may work through casino partners, while the rest of the market is left to commercial brands.

Nevada is an example of a region that has adopted such a practice. Virtual poker and sportsbook options are traditionally associated with land-based facilities, but digital casinos remain illegal.

Some betting enterprises may provide their services under independent licences, accepting bets in offline locations and through mobile platforms.

The Main Things about the American Gambling Niche

The US is one of the most diverse and high-revenue markets in the world.

Key aspects that entrepreneurs should take into account:

• Sportsbook options, land-based and virtual casinos, as well as poker and lotteries, are available in the country. The legality of particular activities depends on the state
• The iGaming vertical is fully legitimate in only 7 jurisdictions: New Jersey, Pennsylvania, Michigan, West Virginia, Connecticut, Delaware, and Rhode Island.
• Bookmaking is a highly fragmented sector. Brands can operate under commercial licences, as well as through agreements with offline entertainment locations, tribal establishments, and sports venues (stadiums and racetracks).