Online Gambling Regulation in United States 2020

Gambling is not prohibited in the USA but still faces a big number of legal restrictions. The reason is that every state can have its own laws about land-based and online casinos. So what is the situation in the US online gambling market?

The US gambling industry is regulated not only by the Federal Government. Every state can pass its own laws to regulate the activity of land-based and online gambling resources. The rules that regulate online gambling sites depend on the documents approved at the federal level, laws of a specific state and decisions of the Federal Gambling Commission.

The federal law is basic here: local level norms cannot contradict it. Besides, there are such exceptions as the status of Nevada and standalone rules for tribal casinos. Previously, gambling was legal only in two states and the rest 48 states banned games of chance. But the modern market has changed. Currently, gambling business is allowed almost everywhere (with the exception of Utah and Hawaii). So how are things going with gambling in the United States?

The United States Online Gambling Laws

The first online casinos appeared back in 1994. Usually, operators registered on the Isle of Man but readily accepted customers from the United States. Established in Canada in 1996, the gambling commission started issuing licenses for online poker and casino activities in North America. The number of gambling websites suddenly increased to several hundred all over the world, and online gambling revenue exceeded $800 million by 1998.

In the USA, online gambling was banned back in 1961 when the country passed the Federal Wire Act prohibiting citizens to transmit sports betting information using telecommunications. In 2002, the US Court of Appeals prohibited sports betting with the exception of other online gambling activities. The Justice Department disputed that decision and stated that all kinds of online gambling were illegal in the USA and gambling advertising was treated as an incitement to commit a crime.

In September of 2006, the United States Congress passed the Unlawful Internet Gambling Enforcement Act (UIGEA), which banned the banks of the United States from processing transactions for gambling websites. Following that, several gambling operators left the US market although the law was not against them: it was intended to fight against money laundering and financial crimes. However, the global online gambling industry was growing and many operators kept accepting customers from the USA.

Relaunch of the US market

In December of 2011, the Justice Department published a conclusion saying that the UIGEA applied only to sports betting. It allowed considering online lotteries, online poker, and online casino games as activities with high potential. In the summer of 2012, Delaware was the first state to legalize online gambling.

In February of 2013, Nevada was the second state to allow online gambling and online poker licenses. In a week, New Jersey was the third state to make online gambling legal and began issuing permits for poker rooms and online casinos in Atlantic City.

In April of 2013, the first legal gambling website started operations in the USA. It was Ultimate Poker room. By autumn, online poker and other gambling facilities were launched in Delaware and New Jersey. Pennsylvania was the fourth and the largest state that passed the online gambling legislation in 2017.

Online gambling laws in different states

A breakthrough for the US gambling market was the repeal of the Professional and Amateur Sports Protection Act of 1992 (PASPA), which banned sports betting throughout the USA (with the exception of Nevada, Oregon, Delaware, and Montana). The Supreme Court lifted the ban in the spring of 2018, enabling the local authorities to decide whether to allow or forbid betting activity on the territory of a certain state.

New Jersey. This state allows online sports betting, online casinos, and online poker. Currently, New Jersey is considered one of the largest gambling markets in the USA. Here, one can find over a dozen legal online casinos and poker rooms.

Pennsylvania. In 2019, the local authorities legalized sports betting, online casinos, and online poker. Such betting companies as DraftKings, FanDuel, and Unibet operate here. Players can bet offline or using a browser / mobile app.

West Virginia. The state allows online sports betting since 2018. Online casinos and poker rooms will have a possibility to start working officially in 2020.

Indiana. The local authorities officially allowed online sports betting in 2019 when they legalized both offline and online sportsbooks. Three online bookmakers DraftKings, FanDuel, and BetRivers operate in the state and five more are expected to enter the market soon.

Iowa. The state allowed online sports betting in 2019 and within six months, several companies were opened there. Online casinos and poker rooms are prohibited.

New Hampshire. Sports betting has been allowed here since late 2019. For now, DraftKings is the only company operating in the online market. The state forbids poker rooms and online casinos.

Nevada. The state where the famous Las Vegas is found has been a monopolist in the sports betting market for almost 20 years. Online betting was allowed here back in 2010.

Delaware. Online betting has been allowed in this state since 2018. Online casinos have been operating in Delaware since 2013 and that is when poker rooms were allowed. It was the first state to launch an online sportsbook after the ban was lifted.

Rhode Island. Online sports betting was legalized in 2019. The first companies are expected to be opened in 2020. Online casinos and poker rooms are banned on the territory of the state.

Oregon. Online betting on sports has been possible here since the autumn of 2019. The state forbids the activity of online casinos and poker rooms.

Michigan. Last year, local authorities allowed all types of online gambling: betting, casino games, poker rooms.

Colorado. The state is considering the possibility of allowing online casinos and poker rooms, whereas online sports betting has been legal since 2019. The first companies are expected to appear this spring.

Montana. The state’s governor signed the law on the legalization of online sports betting in May of 2019. Intralot will be working in the local gambling market. The operation of online casinos and poker rooms is forbidden in Montana.

Tennessee. The state’s authorities passed the law on online sportsbooks in April of 2019. It is expected that the first sites will be launched in 2020.

Illinois. Sports betting was made legal in the state in June of 2019. The first betting websites will start working in 2020. The cost of license acquisition will equal to $10 million.

Prospects of online gambling in other US states

Some states and standalone cities are just considering the possibility of allowing online gambling, while others face different red tape problems on their way to it. For example, California is reviewing two draft laws that regulate the gambling industry and Florida – three at once. Kentucky and Kansas attempted to pass gambling laws. Massachusetts and Missouri are considering this possibility.

Online lottery in the USA

The US online lotteries also follow different rules set by local laws. In different regions of the country, local authorities gave permits for this kind of activity. Sometimes, several years pass after the legalization of online lotteries and before the launch of the first websites. The reason is that time is needed to draft inner regulations and restrictions.

Georgia. Here, an online lottery was set up in 2012 – players got access to services from any town in Georgia. Customers can participate in various draws, including Keno and interactive games.

Illinois. Local authorities were the first in the USA to allow selling lottery tickets online in the spring of 2012. The state’s residents can play on the website of the Illinois Lottery that offers daily draws and instant games.

Michigan. Michigan lottery officially launched its website in the autumn of 2014. At that time, residents of the state were allowed to buy Instant Keno tickets and their electronic equivalents online.

Kentucky. The state allowed selling lottery tickets online in 2016. Here, users can play daily lotteries and take part in instant games. The system for secure online payments was being developed for three years.

New Hampshire. In June of 2017, the state passed the law that allowed selling lottery tickets online. Online lotteries were launched back in 2018.

Pennsylvania. The online lottery business was set up in 2018. Today customers can play instant win games. The assortment is expected to widen in the future.

To conclude

The US gambling market is one of the largest and promising in the world. At the same time, it adheres to complicated rules: the competition is tough just as the government’s pressure on business people.