The US online gambling industry is dynamic and rapidly expanding. Most new forms of gambling require new legislation at the state level. This page concerns itself with bills to expand iGaming (i.e., online casino and poker) and iLottery in the US.
For 2023, that included efforts in New York, Illinois, Indiana, Kentucky, Maryland and New Hampshire. However, most legislative sessions are now at an end, and none of those hopeful states succeeded in their efforts this year.
Instead, Rhode Island emerged as a dark horse candidate and became the year’s only iGaming success story.
iGaming Legislation – Quick Links
Last updated: December 2023
Online Gambling Expansion & The US Legislative Process
Part of the reason the industry is changing so quickly is that legal online gambling in the US is a very new concept. Prior to the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006, the US was essentially a gray market. Afterward, five years of black market activity followed (mostly from online poker sites), prior to the 2011 crackdown known as Black Friday.
It was only at that point that efforts to legalize online gambling began, with New Jersey being the first to launch a full-featured online gambling market. Nevada and Delaware followed suit in a more limited fashion. However, it wasn’t until the repeal of the Professional and Amateur Sports Betting Act (PASPA) in 2018 that the online gambling effort gained steam in other states. The list now includes Pennsylvania, West Virginia, and Michigan, as well.
This state-by-state process is the other reason for the complexity of the US market. Aside from partial prohibitions – like the UIGEA, PASPA and the Wire Act – the federal government has little to say about gambling, leaving it to the states to decide. The result is that the picture is very different in one part of the country or another. Even states which offer the same array of products have their own policies and quirks, different tax rates and licensing structures, and so on. Here’s a breakdown of the repeal of PASPA’s impact two years later.
The decision by a state to legalize or not is therefore not just a “yes” or “no” question. Rather, it entails a lengthy discussion about how gambling will be conducted in the state, and who will have access to the market and on what terms.
2023 Online Gambling Expansion Summary
Coming into 2023, many were optimistic that online gambling legislation would produce some success stories in 2023. Foremost among these was a return to comparative normalcy following the pandemic years.
Although the pandemic is ongoing, it is neither as intense nor as unfamiliar as it was before. Even in 2022, iGaming bills faced an uphill battle because legislators had more pressing matters to attend to. Now, federal COVID relief funding is starting to dry up. At the same time, the loss of tax revenue from retail gaming over the past three years has highlighted for many states the advantages of having a regulated online market.
However, there are still major challenges facing the industry, some of these self-inflicted. For many states, these proved too much to overcome.
The much faster expansion of legal US sports betting led to aggressive marketing campaigns by the top operators, who are now facing public pushback. These are the same companies that also offer online casinos where possible. So, far from holding the door open for online casinos to follow, sportsbooks may have inadvertently slammed it in their face.
In the end, only Rhode Island prevailed. On June 20, Governor Dan McKee signed an online casino bill into law, granting a monopoly to the state lottery in partnership with Bally’s and IGT.
New York, Indiana, New Hampshire, Iowa, Illinois, and Maryland also had iGaming bills on the table this year, while Kentucky considered online poker. None of these succeeded.
Active Online Gambling Bills By State
Legislative sessions have begun, and efforts to legalize online casinos and poker are underway.
We’ve given every state here a momentum rating. These represent our mostly-subjective assessment of the state’s chances to pass the current bills under consideration, or something substantially similar, within the current legislative session. The ratings are as follows:
- O – Success! The bill has already passed.
- A – Bet on it! Support is widespread, all major problems have been addressed, and the bill should pass easily.
- B – Favorable momentum. The effort has mainstream support, but some hurdles remain.
- C – Uncertain prospects. The effort may be complicated, or simply new. Too early to call.
- D – Headwinds. The effort has encountered substantial challenges that make it unlikely to succeed.
- X – Dead in the water. Either the bill is officially dead, or key stakeholders have indicated they see no way to proceed.
Kentucky
Bill Numbers: HB106
Momentum Rating: X
Kentucky’s champion of online poker legalization, Republican Adam Koenig, lost his re-election bid. However, three Democrats have taken up the effort in his absence.
Like Koenig’s many efforts over the years, HB106 attached online poker to an effort to legalize sports betting in Kentucky. Poker, on its own, would not be a sufficiently large source of revenue to warrant attention. On the other hand, online casinos would be a bridge too far for conservative Kentucky. At the moment, the state lacks even retail casinos.
Koenig said at various times that he would drop online poker from the bill if that’s what it took to pass sports betting. Ultimately, that’s what happened.
A fellow Republican, Rep. Michael Meredith, filed a separate sports betting bill to compete with the Democrat effort, which didn’t include poker. It ended up passing, which is effectively a death knell of the prospects of online poker in the state. There won’t be enough interest to warrant a separate online poker bill in later years, and comprehensive iGaming bill including both online poker and online casinos is probably at least a decade away.
Indiana
Bill Numbers: HB1536
Momentum Rating: X
Indiana had been considered by many to be the most likely state to succeed with an iGaming effort in 2023. Unfortunately, it proved to be one of the year’s quickest failures.
An early draft of the bill circulated in December 2022. Some changes were made before it appeared in the House. The proposed tax rate became 20% rather than 18%, and more money would go to addiction services.
The bill’s sponsor was Rep. Ethan Manning, a Republican. He and industry analysts were optimistic about its chances, but Senate President pro tempore Rodric Bray has said he was opposed to the effort.
The bill had until Feb 27 to cross over from the House to the Senate, but that deadline came and went, and Indiana will have to wait for another year.
Iowa
Bill Numbers: HSB227
Momentum Rating: X
Iowa’s 2023 online casino bill never stood a chance.
Many online casino bills are effectively dead on arrival because legislatures aren’t yet ready to consider the issue. More rarely does the bill’s own sponsor declare it hopeless.
Such was the case with Iowa’s HSB227, however. Rep. Bobby Kaufmann told PlayUSA that he was simply refiling his previous legislation to “keep the conversation going,” without any intent of trying to get the bill to pass.
Illinois
Bill Numbers: HB 2239 (new language), SB 1656 (companion to HB 2239), HB 2320 (refile of 2021-2022 bill)
Momentum Rating: X
Illinois took until February to begin its latest push to legalize online casinos. Rep. Edgar Gonzalez Jr. and Sen. Cristina Castro introduced a pair of bills to their respective branches of the legislature. One week later, Rep. Jonathan Carroll introduced a competing bill in the House.
Both versions of the bill use the name Internet Gaming Act (IGA).
The language of Carroll’s draft matches the 2021-2022 effort, which he co-authored. That proposal includes a 12% tax rate, which would be the lowest in the country. It also mandates a six-month in-person registration period.
Meanwhile, the new version of the IGA presented by Gonzalez and Castro has a 15% tax rate, matching that of sports betting in the state. Licensing fees would be higher under their version, but online registration would be available from the day the market launches.
There was no movement and very little discussion of the bill. With the legislative session now on pause, it’s safe to call the bill dead in 2023, though it will remain active in 2024 thanks to Illinois’s biennial legislative sessions.
Maine
Bill Numbers: LD 1777
Momentum Rating: X
Maine’s online casino bill appeared on the scene in April, just as most industry analysts were preparing to call the year a write-off.
Sen. Linda Supica’s LD 1777 would extend the state’s existing online sports betting law to allow the four tribes in the state to offer online casino games as well. There’s one catch, which is that Maine hasn’t even launched mobile sports betting yet.
From a regulatory standpoint, that could actually make things easier, aiming for a simultaneous launch of iGaming and online sports betting in 2024. However, given that Maine lawmakers didn’t want to legalize online casinos alongside sports betting in 2022, the bill was likely no more than a conversation starter and did not go anywhere.
Maryland
Bill Numbers: SB267
Momentum Rating: X (2023), C (2024)
Maryland is a state that looks pretty likely to legalize online casinos eventually. On the other hand, it’s one where the effort is expected to take some time.
The biggest obstacle it faces is a constitutional requirement to hold a referendum on any gaming expansion. It has already cleared that hurdle once for sports betting, in 2020. The question is whether voters will be willing to consider a second major expansion so quickly after the first.
Two Democrat Senators – Ronald Watson and Nancy King – think the time is right. They introduced a bill to put the question on the 2024 general election ballot.
Its deadline to pass in 2023 has now elapsed, but the effort is likely to continue in 2024, so there’s still time before the election.
New Hampshire
Bill Numbers: SB104
Momentum Rating: X
If New Hampshire legalizes online casinos, it will likely be on similar terms to its online sports betting market. It will be a small market, open only to a few operators.
Republican Senator Timothy Lang quietly introduced an online casino bill for 2023. At first, it appeared like placeholder bill, lacking details like licensing fees and a revenue-sharing or tax structure. For that reason, Bonus expected the 2023 effort to be more of the starting point for future conversations than a serious push to legalize immediately.
Instead, the state briefly appeared to be 2023’s most likely contender. The bill has passed the Senate and made it as far as the House Ways and Means Committee, becoming the only effort this year to cross from one chamber to the other.
Unfortunately, Lang had to cripple his bill to get it through the Senate, by removing the possibility of online slots. Despite that concession, it ran into a brick wall in the House, with the Ways and Means Committee’s 20 members voting unanimously to kill it.
New York
Bill Numbers: A1380 (poker), A3634 (refile of 2022 bill)
Momentum Rating: X
Most pundits rated New York as the second most likely state to legalize online casinos this year, after Indiana. Sen. Joseph Addabbo has undoubtedly been a vocal proponent of the idea. He got the ball rolling quickly in 2022, shortly after online sports betting got underway in the state.
There’s no lack of industry support for the idea, as New York is a “Holy Grail” state for online gambling due to its high population, average income, and liberal inclinations. Unfortunately, many of Addabbo’s fellow lawmakers were reluctant to consider further gambling expansion just one year after online sports betting. Bidding for downstate casino licenses is currently underway, compounding the “gambling fatigue.”
In the end, it became clear that 2023 would not be NY’s year for iGaming.
Rhode Island
Bill Numbers: SB948
Momentum Rating: O
Rhode Island was not on many iGaming legislation bingo cards coming into the year. However, Bally’s managed to get Senate Leader Dominick Ruggerio in its corner to lead the effort. That proved to be enough to get the bill over the finish line, though not without challenges along the way.
In particular, several parties including the Rhode Island Lottery expressed concern that the bill was unconstitutional because voters hadn’t explicitly agreed to online gambling. (The Rhode Island constitution requires a referendum on any new form of gambling in the state).
Proponents of the bill argued that online casino games are effectively the same as the retail casino games voters said yes to in 2012. Even so, the lawmakers amended the bill to require live human dealers for online table games in order to avoid a potential legal challenge.
Because Rhode Island will be a monopoly market, many in the industry will not see SB948 as a success. Nonetheless, it does mean that by next year, there will be one more state offering online gaming than there was previously.
Timeline Of US Online Gambling Expansion
The history of US online gambling is too long and complicated to detail in full here. Instead, we have provided a simple timeline of successful legislation and launches of online casinos, online poker, and online instant lotteries.
You can click the link to any particular state’s page to get more info about how exactly the process played out.
2011
- New Jersey passes its first online casino bill, but then-Governor Chris Christie vetoes it due to concerns he wants addressed.
- The U.S. Department of Justice clarifies that the Wire Act applies only to sports betting and would not impede other forms of online gambling.
2012
- Georgia launches the first online lottery in the US.
- Delaware passes a bill to allow online casinos and poker rooms to operate in partnership with the lottery.
2013
- New Jersey passes a revised online gambling bill, and NJ online casinos and poker rooms launch later the same year.
- Nevada passes an online poker bill, and NV online poker rooms launch later the same year.
- Delaware online gambling gets underway.
- The Kentucky Lottery Board approves the idea of an online lottery. No legislation is needed.
2014
- Michigan launches its online lottery, including instant games.
2015
- Delaware, Nevada and New Jersey enter a compact for multi-state poker.
2016
- WSOP launches the first interstate poker network under the 2015 compact.
- Kentucky launches its online lottery.
2017
- New Hampshire and Pennsylvania pass online lottery bills.
2018
- New Hampshire and Pennsylvania launch their online lotteries.
- Pennsylvania passes an omnibus gambling expansion bill, covering online casinos, poker and sports betting.
- The Department of Justice attempts to reverse course on the Wire Act, sparking a legal battle.
2019
- Pennsylvania online casinos launch, followed a few months later by the state’s first online poker room.
- West Virginia and Michigan pass omnibus gambling expansion bills, covering all three major verticals.
- Rhode Island’s successful sports betting bill contains provisions that also enable the lottery to go online.
2020
- West Virginia online casinos launch, but no poker rooms appear.
- Rhode Island’s online lottery launches.
- Virginia passes an online lottery bill.
- The Washington D.C. Lottery Board quietly passes emergency rules for online instant games.
2021
- Michigan online casinos launch, followed a week later by the state’s first online poker room.
- Virginia and Washington, D.C. begin offering online instant lottery games.
- The First Circuit Court of Appeals affirms a lower court’s ruling that the Department of Justice’s revised Wire Act opinion is invalid. Interstate gambling compacts remain legal.
- Connecticut legalizes sports betting and iGaming. Its online casinos and sportsbooks launch on Oct. 19 after a fairly swift bureaucratic process.
2022
- New York online sports betting launches, and Assemblyman J. Gary Pretlow is quick to opine that online poker and perhaps casinos could be next.
- Sen. Joseph Addabbo introduces an online casino bill in the New York Senate. Poker is implicitly included.
- Rep. Adam Koenig resumes his push for sports betting and online poker in Kentucky, with a bill very similar to the one which failed in 2021.
- Indiana introduces an online casino bill, which quickly fails.
- North Dakota tribes ask for online gambling privileges but receive permission only to conduct such activities on their own land.
- Michigan joins the Multistate Internet Gaming Agreement and sets the stage for poker sites to begin sharing traffic as of the beginning of 2023.
2023
- Efforts in the most likely states – New York, Indiana and Illinois – all fail.
- Rhode Island legalizes online casinos, albeit as a monopoly market shared by the state lottery, Bally’s, and IGT.
- New Jersey extends its online casino law for another five years, now expiring in November 2028.
Online Gambling Expansion FAQ
The basics are the same in every state. A bill can originate in either the House of Representatives or the Senate. It will get several readings and go through a committee process before a final vote. After that, it proceeds to the other branch of the legislature for a similar process.
If the two branches can’t agree on specifics or there are competing bills from the two branches, a bill might bounce back and forth several times. Once both branches have approved the same draft of the same bill, it goes to the Governor to either sign into law, or veto.
The specifics vary from state to state. This includes the length of the legislative session, the structure of the committees, and potentially even the number of votes a bill needs to pass. There are also various other procedural differences that usually don’t matter, but can occasionally add wrinkles to a bill’s path to becoming law.
In the current US political climate, states’ rights are a hot button topic. It would be unpopular for the federal government to involve itself too heavily in the subject of gambling.
The fact that the federal government has mostly stayed out of the fray is a good thing, as to the extent it has involved itself, it has been an opponent rather than an ally. The best that can be hoped for at this time is that it will back off entirely and allow states to decide for themselves.
There’s considerable variation, but most states have applied a tax rate of between 10% and 20% to most online verticals. Nevada is an outlier at the low end, charging just 6.75% for all gambling, online or retail. At the other extreme, Pennsylvania charges an eye-watering 54% for online slots, though it taxes table games and poker at a more reasonable 17%.
State-level government organizations. For states that have commercial casinos, it will typically be the same regulator overseeing both retail and online gambling. Elsewhere, it is often the state’s lottery commission, or perhaps a horse racing authority.
There are many reasons to legalize and regulate online gambling. The most common arguments in favor of it relate to the existence of illegal offshore sites, and the fact that regulated operators are preferable in comparison. Specifically:
- Prohibition is a failure when it comes to online gambling. It’s impossible to stamp out illegal offshore sites, but it is possible to draw players away with a superior, legal alternative.
- Regulatory supervision makes for a safer product than is available in the black market.
- Tax revenues from online gambling can be used to mitigate its harm, as well as to fund education and other worthy initiatives.
- When neighboring states have legalized online gambling, failure to do so means losing potential revenue from players crossing the border to gamble.
- A legal online gambling industry creates local jobs, and usually quite well-paying ones.
Somewhat surprisingly, the answer is no. The idea that it does is often trotted out as an argument against legalization. However, evidence to date shows that the opposite is true, and that legal online and retail gambling industries support one another.
The most important thing to do to help the cause is to raise awareness of the dangers of the black market, the fact that prohibition is a failed policy, and that a regulated alternative is the best solution.
The main ways you can do that are to share articles promoting regulated markets, and most of all to write to your state-level representatives. Misconceptions about online gambling abound, and its moral adversaries can be disproportionately loud in their objections. Being equally vocal – but better informed – in your support is the most helpful thing you can do to counteract these obstacles.
About the Author
