Online gambling is happening in most states in the United States whether they have regulated it or not. There is no federal law against online gambling, and it’s up to the individual states to decide whether to legalize it or not. Some states allow online casinos whereas other states don’t allow them.
Every year, state legislatures try to expand gambling. The adoption and legalization of sports betting have been successful in more states than online gambling. Many states still resist legalization. This is despite the fact that their citizens are already gambling in different ways.
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States where online gambling is legal
In several U.S. states, online gambling is legal. In 2024, states where it is legal are:
- New Jersey
- Michigan
- Pennsylvania
- Connecticut
- Delaware
- Rhode Island
- West Virginia
Legal casinos such as Play Gun Lake, which offers online gambling in Michigan, are strictly regulated. They must follow the rules and regulations set by state gambling boards. These are designed to protect consumers while playing online.
Legal sports betting
In contrast to the few states that offer online gambling, there are 38 states plus Washington, D.C. that offer legal sports betting. Most of this type of betting takes place online. Sports betting lobbying efforts have been largely successful in legalizing sports betting although it isn’t that different from other forms of online gambling.
Black market operators
Even in states where online gambling is illegal, players aren’t often prosecuted, and if they are, they receive light penalties. There are no federal laws they break when they place bets online. This doesn’t extend to running gambling operations, except in states where this is legal.
Even though online gambling is legal in some states, there are still black market operators making a great deal of revenue in some of these jurisdictions. They generate more than $9 billion in three of the states where online gambling is legal. It looks as though regulating online gambling doesn’t prevent them from making money.
There are many places to gamble online across the U.S. that don’t fall under the “offshore” category. For example, various online sportsbooks use sweepstakes laws to justify their existence. Sweepstakes laws dictate that consumers do not have to pay to enter. Sweepstakes sportsbooks get around this by allowing players to play games using tokens instead of real money. They can win cash prizes and gift cards without wagering real money. With no real money gameplay, most states agree that this isn’t gambling.
One of the biggest sites is PrizePicks which currently offers Daily Fantasy Sports (DFS) contests across 30 states and Washington D.C. An option called Fliff allows players to ‘redeem prizes’ in 41 states.
There are no laws that specifically address the types of contests sweepstake sites or apps offer. This type of online sports gambling goes on in many states, including those where sports betting is illegal.
Sweepstakes casinos
Sweepstakes casinos are online casinos that also operate like a sweepstakes product. They offer prizes and cash even in states where online casinos are illegal. Players use free tokens to play casino games without making a purchase. Millions of players access these free casino games online every day. They can receive prizes in exchange for sweepstakes tokens although they may need to satisfy some playthrough requirements and other redemption rules.
Online lotteries
Various state lotteries allow players to play online directly via their sites. As many as 48 states in the U.S. permit some form of gambling when including state lotteries. Utah and Hawaii are the two exceptions. While states may be against online gambling, sometimes their state lotteries are actually helping gambling to happen.
While many online lotteries are technically legal, it can be difficult to differentiate some from online slot machines. Various brands allow players to buy tickets for drawings in many different states. The gambling industry forecast shows that it is expected to grow to nearly $745 billion in 2028. Many factors drive the market, and the top opportunities are expected to arise in the lotteries segment.
