Lara Wilson, Expert Contributor at Casino.ca, explores the online casino space in the U.S. With only eight legal and regulated states, things are moving slow, but Wison assesses why states are not forthright in their willingness to legalize iGaming.
Expansion for online casinos in the US is no longer driven by new legislation alone. Instead, operators need to be nimble in navigating political barriers and economic arguments. The path forward is narrower than it has previously been, but it is far from closed. While the pace of online casino legalization has certainly slowed in the US, it has not ground to a permanent halt.
While the future for real money online casino is looking particularly bright in Canada, with the recent launch of Alberta’s open market, south of the border progress has slowed. The reality for iGaming operators assessing their US strategies is that the map is currently at a standstill. Real money iGaming has been legalized in just eight states. These are Connecticut, Delaware, Michigan, New Jersey, Philadelphia, Rhode Island, Maine, and West Virginia. States including Illinois, Indiana, Maryland, New York, and Virginia have all failed to advance legislation at this point.
2026 has been defined by stalled bills and political debate around player protections. Land-based casinos have warned that online casinos could cause them to lose revenue, putting jobs at risk. These fears over cannibalization have long been a barrier to legislation, and are at the root of why many states require online platforms to be tethered to brick-and-mortar casinos.
Operators face stiff competition from unions and local governments that are protective of local casino employment. Getting these groups on side continues to be a tall order, even though many players choose to use offshore casinos, which draw revenue out of state, and frequently the country.
The National Association Against iGaming includes members from a broad spectrum of parties, including religious leaders and campaigners against problem gambling. Most notably, though, are those from prominent casino operators like Churchill Downs, Cordish Companies, and Monarch Casino. The last few years have also seen joiners from Gaming and Leisure Properties Inc, and the Laguna Development Corporation.
The diversity of NAAiG makes it a formidable opponent to new legislation, as its members draw valuable experience from the industry, politics, and social groups, as well as considerable financial interests. Its growth is evidence that operators have not altogether succeeded in meeting the safety concerns raised by citizens.
The legislative mood is currently focused more on responsible gambling guardrails than expanding markets. As regulations tighten in states where iGaming is legal, operators are forced to funnel funds into updating and reinforcing their internal systems. While the cost of compliance is growing, the safest bet for operators is to put plans for new markets on hold, at least for the moment.
With this political climate in mind, it is safe for operators to assume that no meaningful new states will legalize iGaming soon. That doesn’t mean that the efforts of those lobbying for legislation are in vain, though. The industry must continue to work with ministers and the public to untangle the knotty issues around safety, security, and fairness.
Operators can still navigate and find opportunities to grow within the U.S. market. Within the eight existing legal markets, operators can seek to maximize their share by improving retention, cross-selling, and VIP segmentation. These markets still generate billions annually, and competition is fierce but stable.
Operators may also want to leverage prediction markets as a pressure point. Prediction markets that are federally regulated by the CFTC are viewed as a threat to sports betting tax revenue. Some executives, including Rush Street Interactive’s CEO Richard Schwartz, argue that this could actually push states toward online casinos as a more stable revenue source.
Another strategy is to utilize sports betting expansion as a kind of Trojan horse. Sports betting continues to spread across the US, even as iGaming stalls. Operators can lobby for add-on iGaming provisions once a state has established a mature sportsbook market.
States with tribal or hybrid gaming structures may be easier to sway when it comes to passing iGaming legislation. In a move that seemed to come out of left field, Maine became the eighth state to legalize online casinos earlier this year. This development came through a tribal bill rather than a casino-driven one, as would usually be the case. Similar pathways may exist in states where tribes hold regulatory leverage.
In Maine, four Wabanaki tribes were granted exclusive iGaming rights at an 18% tax rate. The tribes also held exclusive rights to sports betting before this. Maine is the only state to have handed iGaming rights to tribes, and it will be interesting to see if this sets a precedent.
The crackdown on sweepstakes casinos is another development that moves in iGaming’s favor. Numerous states are now aggressively banning or redefining sweepstakes casinos as illegal gambling. An increasing number of bills are also chasing the banks and marketing affiliates that support them. In 2025, California, Connecticut, Montana, New Jersey, and New York all moved to restrict the model.
This year has seen the trend gain momentum, with Indiana, Iowa, Maine, and Oklahoma bringing in their own legislation. Louisiana, Maryland, Minnesota, Tennessee, and Virginia all have pending legislation. Across the board, sweepstakes are being tackled by jurisdictions as a challenge to compliance. As these grey-market products disappear, regulators could become more receptive to regulated alternatives. Operators can position themselves as a safe and taxable replacement.
Reframing the debate on cannibalization is an essential step in moving the debate beyond the future of land-based casinos. This remains the single biggest political blocker for iGaming operators, which need to offer up clearer evidence that online casinos can grow the market as a whole rather than simply take revenue from casino floors. This is a point that has been proved by studies, but has not yielded political persuasion.
Unions are another major source of opposition to be won over. Offering revenue-sharing models or committing to bricks-and-mortar casino investment could be useful inroads to soften that resistance.
In some states, the strategy may have to switch to persuading the public, that is, if the matter is put on the ballot. For instance, Maryland may require voter referendums rather than legislative action. While this is a slower route, it is still a viable one.
The biggest opportunity for operators seeking to tread a new path in the US may come from applying external pressure, as opposed to relying on internal lobbying. If prediction markets or offshore casinos continue to erode state tax bases, legislatures may be forced to reconsider iGaming simply to protect revenue.
This is a scenario that industry leaders are increasingly coming to expect. The future belongs to those who can deepen their presence in existing markets, build smarter alliances, and position their brands as trustworthy, safe alternatives to offshore sites and sweepstakes models.
