iGaming in the US has actually been a complex field to navigate, especially because a combination of federal and state laws regulates it. Regardless of that, more people have continued to explore it as an entertainment option widely in the country. In fact, about 60% of US adults did some gambling within 2023.
Many more gambling platforms have appeared, specifically more than 380 licensed businesses offering online gambling services in the US. Time has indeed taught players and operators about working within that complex framework, which is reflected in the growth of the industry.
The increase even became more significant when states got more control over what happens on their land in matters of gambling. Since then, there have been various legislative changes that have made different parts of the country more favourable for wagering businesses.
As a matter of fact, the national commercial gross gaming revenue (GGR) hit over $66.6 billion in 2023, which was a 10% increase from the previous year’s record. If you are curious about the changes and the current legislation status of gambling in the US, read on.
State-level regulation
Each of the 50 states in the US has its own laws that govern various gambling activities within its borders. While gambling is legal according to US federal laws, each state has the liberty to legalize or ban whatever form of gambling. Isn’t it interesting how, one time, you can be in Nevada enjoying a wide variety of gambling options, and then you cross the border to Utah and find totally different laws, where all forms of gambling are strictly banned?
Well, more states have continued to warm up to wagering activities, including state-run lotteries, land and online casinos, and sports betting. In fact, 48 states have legalized some form of gambling so far, with the exceptions of Hawaii and Utah, where every type of gambling is completely prohibited. That means 48 different regulation systems, each determining the types of betting they allow and the specific rules that apply to what they have allowed.
Sports betting, which was once federally banned, has become more popular since the ban was lifted in 2018. Now, 38 states, plus the District of Columbia, offer it legally on land or online. Actually, the number will go up by one soon because Missouri voters narrowly approved a constitutional amendment to legalize it in November last year. Of course, the extent to which you can go with sports betting depends on your state of operation. Some states, like West Virginia, are steps ahead of others, offering both sports betting and online casino gaming, with bonuses like WV free spins to attract more players.
Federal regulation
Other than managing cross-state betting activities, the federal government is playing more of an oversight role in the gambling sector since the states are the primary regulators. It has put in place several major laws that determine how the country handles gambling generally. One of them is the Wire Act (1961), which was passed to help curb organized crimes that were increasing at an alarming rate. The law basically prohibits sports betting across state lines over the internet.
There is also the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006, which forbids businesses from knowingly accepting or processing proceeds related to online illegal gambling activities under state or federal law.
While the law doesn’t ban online gambling, it actually makes it harder for illegal online gambling businesses to operate or spread by cutting off their cash flow. The Indian Gaming Regulatory Act of 1998 is also in play, letting Native American tribes run gambling activities on their lands based on their agreement with the state governments.
Though the Professional and Amateur Sports Protection Act (PASPA) of 1992 was also a major federal gambling law, it was repealed by the Supreme Court in the case of Murphy v. NCAA. PASPA banned most forms of sports betting across the US until 2018, when it was overturned, allowing states to choose for themselves if they want to allow sports betting or not.
A few challenges
With the duality of the US gambling legal system, there have actually been several benefits and also a few hiccups. Each state setting its own gambling laws has brought about some inconsistencies in the country because what is legal in one state might be illegal in another. That has been quite confusing both for players and operators, requiring them to navigate with a lot of caution.
Some people also feel that the restrictions on interstate gambling are a limitation to their growth when it comes to internet gambling. In this tech age, more players are tending towards online gambling, and they want the liberty of interacting with other players from other states in the games. But that might be difficult because of the regulatory differences.
You actually need to take time to understand the combination of federal and state gambling laws that apply to you to play or operate a gambling platform in the US comfortably. It may seem hard because of the complexities, but it is definitely essential so that you don’t accidentally attract crazy penalties or even imprisonment out of ignorance.