US Gambling Laws – Legislation and Online Regulation

While gambling is widespread throughout the states, US gambling laws are complex and can be difficult to understand. This is because each state has the power to enact their own gambling legislation. Furthermore, different states take a different approach to the various forms of gambling.

Some states have taken a progressive approach to legalization and regulation of gambling in all its forms. Some allow only certain types. And a few take a hard anti-gambling stance. In this blog post, we will explore the laws for gambling in the United States. Find out more about United States gambling laws and discover which states permit online gambling.

Gambling Laws by State

US gambling laws are managed at a state level. Each state is given the authority to regulate or ban gambling in their jurisdictions. State authorities have the option to decide which forms of gambling are permitted. The decision on how old you must be to gamble also falls to states to determine. If you want to gamble legally in the United States, you need to know the US gambling laws in each state to understand what is permitted where you reside. In the table below, you can see the legal status of different types of gambling by state:

While United States gambling laws vary from one state to another, most states allow some form of legal gambling within their borders. Hawaii and Utah are the only two states to outlaw all types of gambling completely. While state-run lotteries are the most widely permitted form of gambling across the states. In fact, there are only six states that do not allow the sale of lottery tickets; Alabama, Alaska, Hawaii, Mississippi, Nevada, and Utah. Of the 48 states that offer a lottery, only 11 permit online lottery ticket sales.

The Supreme Court overturned the Professional and Amateur Sports Protection Act (PASPA) on May 17, 2018. This landmark decision permitted states to offer sports betting, which had been categorized as illegal under the Act. By the end of 2018, full-scale legal sports betting was available in 8 states; Delaware, Mississippi, New Jersey, New Mexico, Nevada, Pennsylvania, Rhode Island, and West Virginia, with others following soon after.

There are 25 states with legal commercial casino gaming. Tribal casinos operate in 29 states, with 15 states featuring tribal casinos exclusively. Under US federal gambling laws, namely the Indian Gaming Regulatory Act of 1988, casinos can be set up on Native American Trust land. The tribes must enter into a tribal-state compact, which includes agreements regarding regulation and revenue share for the state fund. Online gambling laws by state can allow for commercial and tribal casinos to operate internet-based casinos and other types of gambling games. It is also possible to play at US PayPal casinos on the go, thanks to their fantastic web-based casino apps.

US Federal Gambling Laws

There is no federal law that legalizes or prohibits gambling, with US gambling laws managed at a state level. Yet there are federal laws which can impact gambling. The bulk of federal gaming laws do not directly impact gamblers. Instead, they are aimed at curtailing money laundering and criminal activity. Others pertain to specialized situations, such as operating gambling on riverboats. The key US federal gambling laws in this area are:

Online gambling has been subjected to stringent regulation by the US government. With the boom of the internet in the 1990s and the increased popularity in online gambling, the Department of Justice and Congress explored existing federal laws to find how to apply them to internet gaming. New US online gambling laws were introduced as well. There are a couple of federal laws which have been used to restrict and manage online gambling. While a further law used to ban sports betting was recently overturned. The main federal laws addressing gambling are:

The Wire Act of 1961 was used to restrict online and interstate gambling. The law was interpreted to mean that all online gambling was illegal. Yet in December 2011, the Department of Justice gave the legal opinion that the Wire Act only applied to sports betting. This opened the possibility for states to move forward with legal online lottery, casino, and poker games.

The Unlawful Internet Gambling Enforcement Act (UIGEA) did not ban online gambling explicitly. It did, however, make it an offence for US-based payment processors to perform financial transactions for internet gambling sites that were not authorized or legal. As such, many offshore gambling sites withdrew their services from the USA.

Sports betting used to be illegal under the Professional and Amateur Sports Protection Act of 1992. Exceptions were made for four states that already had some form of legal sports betting, namely Delaware, Montana, Nevada, Oregon. Yet New Jersey fought a lengthy battle to lift restrictions, culminating in the Supreme Court’s decision to overturn PASPA on May 17, 2018. Sports betting, both land-based and online, can now be legalized and regulated by individual states.

Online Gambling Laws by State – Where is it Legal?

While United States online gambling laws allow each state to regulate or prohibit online gambling, few states permit online casinos. In fact, there are currently only five states that have legalized online casino gaming; Delaware, Michigan, New Jersey, Pennsylvania, and West Virginia. Of these, Michigan and West Virginia have yet to open online casino sites in the USA.

As for online sports betting, the monumental overturning of existing federal laws has led to a flurry of states legalizing and regulating the online betting industry within their borders. In the following sections, we will take a closer look at the states that have legalized online sports betting and casinos.

Colorado

Colorado is among the latest states to launch online sports betting. In November 2019, Colorado approved sports betting at its land-based casinos, following a voter referendum. The new legislation allows the state’s casinos to apply for licenses to offer both retail and online sportsbooks legally.

Colorado’s first two online sports betting sites launched on May 1, 2020. With the industry in its very early days, you can expect there to be further betting apps released in the coming months. Despite the backing of Colorado residents to legalize sports betting, there are no plans in place for the legalization of online casinos and poker in the Centennial State.

Delaware

Delaware is at the forefront of legalized online gambling in the US. It was the first state to legalize online casino gambling in 2012, with the first online casino launched in 2013. It is also one of the few states that allow online poker, having teamed up with Nevada and New Jersey to allow inter-state online poker tournaments.

Following the overturning of PASPA in May 2018, Delaware was the first state to change their sports betting laws. The first online sports bet was placed in Delaware in June 2018. Delaware’s three casino racetracks (or racinos) offer casino games and sports betting online.

Illinois

Illinois retail and mobile sports betting are legal and authorized under legislation passed in 2019. The state’s $45 billion capital plan was signed in June 2019, part of the plan permitted sports betting. Retail sports wagering made its debut in Illinois in March 2020. Although online betting is legal, it is yet to launch in the state.

Indiana

Legislature passed a new gaming law in early 2019, legalizing retail and online sport betting in Indiana. Retail sports betting was launched in Indiana in September 2019. Governor Eric Holcomb was the first to place a bet in the state, placing his wager at the Indiana Grand Racing and Casino. Online sports betting apps followed in October.

Online casinos and poker sites are not permitted to operate in Indiana under the state’s legal structure. Indiana is one of the few states that has gone so far as to criminalize such types of online gaming. As such, it is a criminal offence to play casino games and poker online in Indiana.

Iowa

Iowa joined the league of states that permit sports betting in 2019 with the passage of Iowa House Bill 617. Online sports betting was launched in August 2019, just three months later, with five sportsbooks available within the first six months of legalization. Iowa is one of the few states that require online players to verify their identity at a land-based sportsbook partner. However, this will no longer be required after 2020.

Michigan

In December 2019, legislation was signed off by Governor Gretchen Whitmer to legalize online casinos, poker, and sports betting in MI. Michigan became only the fourth state to legalize all three types of online gambling products. The expansion of gambling within the state will provide tax proceeds to support education.

Once the necessary legal framework and regulatory rules have been ironed-out, Michigan’s 24 tribal casinos and three commercial casinos will be able to apply for licenses to offer online gambling services. Sports betting in Michigan was launched on March 11, 2020. While it is expected that online betting apps should be available in 2021. Online casinos and poker sites are likely to launch shortly after.

Nevada

As the home of hundreds of legal casinos, Nevada is synonymous with gambling. So, you may think that NV would have some of the most progressive online gambling laws by state. Yet despite, or moreover, because of the thriving land-based casino industry, online casino gaming is not legal in Nevada. With fierce opposition from the casino lobby, it is highly unlikely that online casinos in Nevada will open their virtual doors any time soon.

The only legal types of online gambling in Nevada are sports betting and poker. Yet to create an account at a Nevada sports betting site, you must first register and deposit in person at the casino behind your preferred sports betting site. Online poker has been legal in the Silver State since 2013. In March 2015, Nevada and Delaware embarked on a poker liquidity sharing agreement. In April 2018, New Jersey also joined the agreement to pool poker players across the states.

New Hampshire

New Hampshire is a state with legal online lottery and sports betting. The Granite State rolled out its first sports betting app on December 30, 2019. In an unusual move, West Hampshire’s online sportsbook was launched before any retail sportsbooks opened. Up to 10 retail sportsbooks will be permitted in the five cities that voted for the new sports gambling legislation.

New Jersey

New Jersey currently has the largest regulated online gambling market in the United States. NJ online casinos have been in operation since February 2013. New Jersey offers the most diverse online gambling market of all states, and gamblers in NJ have access to many licensed operators that are based in Atlantic City. Online poker was also authorized under the same legislation that permitted online casinos.

New Jersey was instrumental in the fight for legalized sports betting in the USA. And their persistence significantly impacted US gambling laws. After years of lobbying for the right to offer sports gambling, they took their argument to the Supreme Court. The Court ruled in favor of New Jersey State, and PASPA was overturned. On June 11th 2018, legal sports betting was signed into NJ state laws. Online sportsbooks are now widely available to gamblers in the Garden State.

Pennsylvania

In October 2017, Pennsylvania introduced laws legalizing online gambling. House Bill 271 was signed into law by Governor Tom Wolf, permitting online casinos, poker, sports betting, and lottery to operate in the Keystone State. In June 2018, the Pennsylvania iLottery was launched. The first legal online casinos in Pennsylvania were launched in July 2019. Four months later, the state’s first legal online poker site was officially launched in November 2019.

Following the Supreme Court ruling to overturn the ban on sports betting under PASPA, Pennsylvania was quick to embrace the decision. With sports betting legislation already in place since 2017 in the state, many of the land-based casinos in Pennsylvania began taking sports bets. In May 2019, the first online sportsbook in the state was launched by a land-based casino operator, with many more quickly following.

Rhode Island

Retail sports betting became legal in Rhode Island in 2018 when a Senate budget bill was signed into law. A few months later, in March 2019, the law was expanded to include online betting. In September 2019, Rhode Island launched its first mobile sports betting app. The app was operated by the Twin River Casino. The state’s other commercial casino, Twin River Tiverton launched a sports betting app shortly after.

Tennessee

In May 2019, Tennessee introduced the sports betting bill into state law. What makes the Volunteer State unique is that it does not have any land-based gaming venues. As such, sports betting will only be permitted online under the new law. Online sports betting is expected to launch in Tennessee during 2020.

West Virginia

In March 2018, The WV Sports Lottery Wagering Act was passed, making sports betting legal in the state. The law was passed before a decision was made by the Supreme Court regarding PASPA. Once the ruling was made, WV became the fifth state to launch full-scale sports betting in December 2018. The state’s only online sports betting app was withdrawn in March 2019, following disagreements with technical partners. Still, online sports betting was successfully launched through a different operator from August 2019.

The West Virginia Lottery Interactive Wagering Act was passed in March 2019, which legalized online casinos. The state’s five land-based casinos will have the opportunity to develop online gaming sites and apps and to apply for a license to operate online gambling. The launch of online casinos in West Virginia is expected in 2021.

Regulation of Gambling by State

With the legalization of gambling comes the need for licensing and regulation. Each of the states with legal gaming has a gaming control board or commission. Such government agencies are responsible for ensuring the integrity of the gaming industry within their state. They are also tasked with enforcing state gaming laws and ensuring that revenue is contributed to the State fund.

In many states, the role of licensing, regulation, and law enforcement is handled by a single authority. In others, a separate enforcement department of state government carries out the enforcement role. Some states also have different regulatory divisions for different types of gambling. Here you can see a list of US state gambling regulatory authorities:

In addition to state government regulation, the National Indian Gaming Commission is responsible for overseeing gaming on Indian lands for the federal government. Each state with tribal gaming has various gaming commissions pertaining to each Tribe. Tribal gaming commissions liaise with state gaming boards regarding licensing, regulation, and revenue contributions to the state.

FAQ about Gambling Laws in the United States

To make this gambling laws US blog post as useful as possible, we have created a handy FAQ section. US gambling laws is a complex topic that gives rise to many queries. We have collated the most asked questions about United States gambling laws, and in the following section, you will find the answers.

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