Lara Wilson, an expert contributor at Casino.ca, analyzes the current state of online casinos in the United States. With legislation in only eight states, the expansion of iGaming faces significant hurdles, and Wilson examines the reasons behind the hesitation among states to embrace online gaming.
The growth of online casinos in the U.S. is now influenced not only by new laws but also by the need for operators to maneuver through political and economic challenges. Although the pace of legalization has slowed, it has not completely stalled.
In contrast to the optimistic outlook for real money online casinos in Canada, highlighted by Alberta's recent market opening, progress in the U.S. has stagnated. Currently, real money iGaming is only legal in Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, Rhode Island, Maine, and West Virginia, while states like Illinois, Indiana, Maryland, New York, and Virginia have stalled on advancing relevant legislation.
The ongoing political dialogue in 2026 has remained centered on the protection of players, with land-based casinos expressing concerns about potential revenue loss from online operations. Fears of market cannibalization complicate legislative efforts, prompting many states to link online gaming to existing brick-and-mortar establishments.
Competition from labor unions and local governments striving to protect casino jobs remains intense. Convincing these groups to support online gaming initiatives has proven challenging, particularly as many players gravitate toward offshore casinos that divert tax revenue away from local economies.
The National Association Against iGaming (NAAiG) includes a diverse range of stakeholders, from religious leaders to notable casino operators such as Churchill Downs, Cordish Companies, and Monarch Casino. This coalition’s influence is substantial, reflecting the industry's ongoing struggle to address public safety concerns.
Currently, the legislative emphasis is on establishing responsible gambling measures rather than expanding the iGaming market. As more stringent regulations take hold in states where online gaming is permitted, operators must invest increasingly in compliance, making new market entry less viable for now.
Given this climate, operators can expect a lack of new state legislation legalizing iGaming in the near future. However, ongoing lobbying efforts for legislative change are critical. The industry must engage with lawmakers and the public to resolve the pressing issues around safety and equitable gaming.
Despite these challenges, opportunities still exist within the existing legal frameworks. Operators can focus on enhancing customer retention, cross-selling services, and optimizing VIP experiences. While competition is fierce, the legal iGaming markets in the U.S. continue to generate substantial revenue.
Operators might also consider utilizing federally regulated prediction markets as leverage. Some industry executives, including Richard Schwartz from Rush Street Interactive, suggest that these markets could incentivize states to explore online casino options as a stable revenue source.
Another potential strategy is to advocate for iGaming provisions in conjunction with sports betting expansions. As sports wagering gains traction nationwide, operators can push for online gaming addendums following the establishment of successful sportsbook markets.
States with tribal gaming interests may present more favorable opportunities for iGaming legislation. Notably, Maine recently became the eighth state to legalize online casinos, doing so via a tribal bill rather than a communal gaming initiative. This unique approach might pave the way for similar developments in other states where tribal interests have regulatory sway.
Maine has authorized four Wabanaki tribes exclusive rights to online gaming, setting a tax rate of 18%. This marks a significant moment as it is the first instance of tribes gaining these rights, raising questions about future precedents.
The crackdown on sweepstakes casinos could also bolster iGaming's prospects. Many states have begun targeting these establishments, which some define as illegal gaming. In 2025, states such as California, Connecticut, Montana, New Jersey, and New York initiated legislation to impose restrictions on this model. The trend accelerated this year, with Indiana, Iowa, Maine, and Oklahoma all enacting similar laws. In contrast, jurisdictions such as Louisiana, Maryland, Minnesota, Tennessee, and Virginia are grappling with proposed legislation to address sweepstakes issues. As these unregulated operations diminish, the potential for regulated alternatives may increase, allowing operators to present themselves as lawful and taxable options.
Addressing concerns over cannibalization remains imperative in persuading lawmakers to support iGaming initiatives. Operators must provide clearer evidence supporting the idea that online gaming can enhance overall market growth instead of merely siphoning revenue from traditional casinos. While studies support this claim, they have yet to sway political opinion effectively.
Building alliances with unions is another critical avenue. Proposing revenue-sharing models or committing to enhancing brick-and-mortar facilities could mitigate opposition.
Public persuasion may be the approach in some states, wherein legalizing measures might require voter approval instead of straightforward legislative action. Maryland, for instance, may see such proposals put to referendum. While this method could lengthen the process, it still represents a viable option.
Ultimately, the best opportunities for progress may arise from external pressures rather than relying solely on internal advocacy. If prediction markets or offshore casinos continue to erode state tax revenues, lawmakers may find themselves reconsidering iGaming legislation as a means of protecting state funds.
As this scenario unfolds, industry leaders anticipate that success will come from strengthening their positions in current markets, forging beneficial partnerships, and positioning their brands as reliable alternatives to offshore operations and gray-market models.
