In 2018, the Supreme Court declared that the banning of sports betting in the US was unconstitutional. Since then, it has been up to individual states to determine the legality of gambling within their borders. New Jersey was the first state to take advantage, in 2019, having been the reason the original ban was overturned. While around 40 states have legalized online sports betting, only seven including Michigan as well as New Jersey, have legalized iGaming or online casino betting.

Most states do not have regulated iGaming markets, which means players turn to offshore or out-of-state casinos for their gambling activities, including some of the best no-limit online casinos. As crypto writer Michael Graw explains, these sites offer substantial bonuses and many do not require users to reveal their personal details, as they’re blockchain-based platforms with enhanced security features. This means players still enjoy the games they want to play but the states themselves do not get all the benefits they could. Still, bear in mind that such winnings need to be reported to the tax authorities, even if they’re won in crypto.

Internet gambling betting handle in Michigan is approximately $400 million per month, bringing in more than $35 million a month, equivalent to more than $400 million a year in tax revenue. The majority, 95%, of this comes from online casinos. These figures show that states that have not yet legalized online casino gambling may be missing out on a large chunk of tax revenue. Michigan has had the largest online gambling industry of all US states for the past three years, marginally beating New Jersey and finishing ahead of the likes of Pennsylvania.

Despite the tax dollars raised, Michigan remains only one of seven states to have regulated iGaming. The most recent to have introduced legislation was Rhode Island in 2023. Although many had expected Maryland and Maine to follow in 2024, neither state managed to pass regulations this year and it is now expected to be at least 2026 before either achieves regulation.

There are several key arguments against iGaming regulation, with the main one being that it would cannibalize physical casino revenue. Critics argue that if players had the convenience of being able to play casino games online, they would stop going to brick-and-mortar casinos.

This would have the knock-on effect of taking revenue away from tribes in those states. Many states allow gambling in tribal casinos, enabling the tribes to raise revenue from this potentially lucrative source.

At the start of the decade, more than half of all physical casinos in the US were tribal casinos, and California’s tribal casinos alone made over $8 billion a year in revenue.

It is possible to prevent this loss of tribal revenue by requiring that an online casino must partner with a local physical casino, ensuring that at least some of the revenue of the new iGaming institutes would go to local tribes. This approach might also help convince local casinos not to object to iGaming regulation plans, which proved a problem in Maryland negotiations.

Although uptake of iGaming regulation has been relatively slow, at least compared to the regulation of online sports betting, there are several states where legislation could be introduced.

New York has some of the most open gambling laws in the country, with everything from online sports betting to physical casinos being legal. However, iGaming is not on that list. New York continues to approve new casino licenses and many analysts believe the state has yet to approve iGaming because of a fear of job losses. However, with an estimated $1.5 billion a year in tax revenue to be raised from online casinos, it is likely that parties will continue to push for new rules.

Iowa is another state that has seen its iGaming efforts stall in recent years. Representative Bobby Kaufman has been the man behind submitting proposals for the past two years. He has said he is unlikely to try again in 2025 but also said that if somebody else were to submit plans, he would likely give them his backing.

Maryland failed to get a new bill past the Senate earlier this year, which would have meant the decision would have been put to the public vote. With no public ballots until 2026, even if a bill were to get past the House and Senate next year, nothing could be passed for two years. However, it does seem likely that the state will continue to push for legalized iGaming and Maryland could still be one of the next states to introduce iGaming.

As states like Michigan continue to reap the tax rewards of legalization, other states, especially those struggling to balance budgets and that would benefit from an influx of iGaming tax revenue, will continue to watch. It seems highly likely that more states will continue to push for regulation, although there are hurdles and obstacles to overcome in all cases. And, even if new bills get passed, it will still ultimately be down to the public to determine whether iGaming becomes legal.