States with Legal Online Casinos
Currently, Michigan, New Jersey, Pennsylvania, Nevada, and Delaware have online casino games live. Pennsylvania Lottery also has instant games available on the PA Lottery app. Instant games are essentially online scratcher and casino-like games.
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States that will likely take the Longest to enact Online Casino Regulation
Unfortunately, several states in the US seem to be stuck in the stone age. Whether it be a religious angle or just conservative lawmakers, these states haven’t made any form of online betting legal yet. It’s anyone’s guess when and if they will legalize online casinos.
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The Legal States
How it all Started: The Gambling Forerunners
The history of gambling in the United States is rich and complex, and along this line, nothing more epitomizes it than the glitz and glamour of Nevada’s sprawling casinos. In February of 2013, the state finally made online gambling legal, of course, much to the delight of its venturous populace. By breaking new ground and implementing some of the most cutting edge gambling laws in the nation, Nevada collected consistently large earnings from the mammoth business through the various taxes and charges. Also, back in February of 2013, New Jersey signed into law its own legalization of online casino betting. Governor Chris Christie signed the bill, A2578, with substantial bipartisan support: a rarity today. After months of tests and trials, online gambling officially kickstarted on November 26, 2013. In conjunction with the New Jersey Constitution, all online gaming servers must reside in Atlantic City itself. Similar to Nevada, the reasoning behind the forthcoming rules and regulations were threefold: for the state to collect revenue through taxes, to support New Jersey’s land-based casinos, and to provide a legitimate legal gambling experience.
Not all states were as quick to legalize online gambling as Nevada and New Jersey. It took five whole years of discussion and deliberation for Pennsylvania to legalize online wagering. As bill H271 was invoked, the rust belt state was enveloped by tons of newfound revenue encroaching upon nearly $125 million in its first year alone. Most significantly for Pennsylvania specifically, the newly legal online casino business helped alleviate concerns that the state’s land-based casino enterprise would fall victim to the competition of booming neighboring states. In a way, it would give the state a leg up as it rivals competition by providing another source of gambling revenue interdependent of the brick and mortar casinos readily abundant in the Keystone state. Mississippi’s gambling history is nothing short of rich and far-reaching. In fact, it’s been said that Native Americans gambled regularly on such things as card games and horse races long before Mississippi was actually a settled state. Eventually, in 2017, daily sports betting was legalized. Bill H967 was generally vague, almost intentionally to avoid further scrutiny, but got the job done for gambling stands. A regulatory framework was added following the bill’s passage in 2017, and executive director Allen Godfrey has gone on the record stating that those who participate in unregulated, illicit gambling are being arrested to this day.
Small States, Big Money
Moving on, following the passion of bill S415 in 2018, online casino betting became legal in West Virginia. The bill was passed after years of attempts by delegate Shawn Fluharty and public support from attorney general Patrick Morrissey. The mountain state hopes to have its online betting platform up and running before the start of the football season in September. This past June, the smallest state in the nation, Rhode Island, legalized sports gambling themselves. The bill was passed strikingly by both the House and the Senate to the likes of 66-7 and 34-2, respectively. However, the bill only legalized land-based sports betting, but similar to other states. Online gambling will be legal if the participant is wagering on site. While the Ocean state must surely be ecstatic in anticipation of the forthcoming revenue, their projections of $900 million in the first year seem to lean on the optimistic side. Because betting is restricted to Lincoln and Tiverton, the chances of hauling in those kinds of numbers seem slim.
Building the Foundation: Brick and Mortar Casinos
Grand Problems for the Garden State
Despite the abundant presence of online casinos in our increasingly digital culture, brick and mortar casinos still serve as the backbone for a strong and stable gambling experience. The previously mentioned states: New Jersey, Delaware, Pennsylvania, Mississippi, West Virginia, Rhode Island, and Nevada, all contain reliable land-based casinos. New Jersey’s handful of brick and mortar casinos have relied on the revenue generated from online gambling to keep them afloat. The state’s casinos have recently overcome a decidedly rough patch where many of the casinos, including the Trump Taj Mahal, were forced to be closed due to lack of revenue. The recent upswing across the state can be attributed to a more concentrated online gambling presence and the legalization of sports betting, which has brought in an entirely new source of earnings.
Different States mean Different Problems
On the other hand, Delaware’s land-based casino enterprise poses an uncommon dilemma upon the state. Unlike many other states where officials and businesses welcome the perks of running a billion-dollar industry within state lines, Delaware’s small businesses are publicly opposed to casinos’ implementation. From restaurants’ perspective to even local convenience stores and bars, unrestrained sports betting accruing in the casinos is negatively impacting their own businesses. The correlation is a fairly easy one to see, as customers who may usually eat and drink at local stores now have a more lavish source to get their fixes in. Its effect may be more impactful in a smaller state like Delaware than Nevada, or even Pennsylvania, due to the populist appeal of casinos weighted against smaller family businesses. Speaking of Pennsylvania, their twelve casinos are also excited to set up true to the end gambling sites. Like previously said, although Pennsylvania is pleased with the performance of their land-based casinos, the rivalry amongst its flanking states makes it difficult for the oil state to rely exclusively on old fashioned casinos. This is especially true when one considers that Pennsylvania casinos have not yet constructed sportsbook facilities. Without the potential return of sports betting, the state casinos are trying to remain competitive as the sports facilities’ development nears its end.
In the South and Beyond
Mississippi’s gambling laws have been put into place exclusively for riverboat and Native American casinos in the deep south. In the 1980s, Native Americans were permitted to offer these casinos, and despite the modern look and feel of these gambling hubs, their history goes further back than one would imagine. Location wise, of the twenty-eight casinos, many are located along the Mississippi and the Gulf Coast’s outer edge. The disparity between the number of casinos in Mississippi and West Virginia is quite surprising. Even though West Virginia only holds five land-based casinos to Mississippi’s twenty-eight, West Virginia’s are unquestionably larger. Specifically, the Hollywood Casino seems to be the new center for gambling devotees. The Hollywood Casino is the first of the five casinos to offer licensed sports betting and is partnering with DraftKingsto provide a deeper wagering experience. With the evidently small state Rhode Island is, it’s unsurprising that only three casinos have sprung up, the largest being the Twin River casino. The casino holds over 4,200 gaming machines. This June’s decision to legalize sports gambling should be a sigh of relief for the state’s officials, especially with some of the gaudy internal revenue projections. Rhode Island isn’t exactly the hottest tourist spot, so more and more tourist draws would be welcome additions. Finally, Nevada is, of course, the hot bead of all gambling action. As far as land-based casinos, the best received seem to be the Wynn Las Vegas Casino and the Palazzo Resort Casino. With the recent pooling of online poker players and the PAPSA decision in May, Nevada hopes to continue setting the standard in the world of betting.
Independent Suppliers Want in
Getting a Piece of the Pie
As this handful of states continue perfecting their product, independent partners are longing for a chance to get in on the action. Among the notable independent sportsbooks such as FanDuel and DraftKings, DraftKings is making heavy ground in battleground states such as New Jersey and West Virginia. The partnering process is the embodiment of a symbiotic business relationship between casinos and suppliers due to the fruits it delivers for both sides. Across all states that have legalized sports gambling, partnerships with these companies provide a physical sportsbook presence that makes sports betting quicker and easier for customers. Moreover, it opens up the possibility of creating mobile and online wagering options that are crucial, if not necessary steps, to ensure exponential growth in the 21st century.
The Competition Heats Up
Because DraftKings has been catering their product for nearly a year, they look to have a leg up on the fierce competition expected. Interestingly, DraftKings and FanDuel are not only competing against each other but against the brick and mortar casinos’ own products they may roll out. For instance, Resorts Casino, located in Atlantic City, New Jersey, a key battleground state for independent suppliers, has already created its own fantasy sports product, dubbed FastPick. This service performs many of the similar functions that an independent supplier may furnish, such as picking players head-to-head. Because of factors such as this, DraftKings and FanDuel are already spreading their clout into states such as California and New York; these states are expected to house some of the largest gambling centers in the nation. To do this, suppliers are spending their own money on intense lobbying efforts, and in this lies the benefit of DraftKings older shelf life. The company’s past life of operation is giving them a good head start over their competing suppliers.
United States Gambling Retrospective
A Controversial History
Although it may seem like it today, gambling wasn’t always seen as a controversial exercise. In fact, before the 20th century, there wasn’t much of a legal framework surrounding the industry. However, as a conservative tide swept the nation in the early 1900s, much of the neutral public perception about gambling was swept under the rug. Casinos countrywide were shut down until 1931, when Nevada reopened many of its numerous casinos. New Jersey followed Nevada’s precedent, and the notorious Resorts International in Atlantic City opened in 1978. Since then, the momentum has been steady, and the new hot button issue has become sports gambling, an issue that the sports leagues had definitively stood against for decades.
The Leagues Strike Back
Horse race betting had long been a staple in American society, but sports gambling had always received a poor reputation aside from this exercise: perhaps deservingly so. After members of the White Sox fixed the 1919 World Series, sports decision-makers were gifted with what seemed like a foolproof argument: sports gambling maims the integrity of the game. Even as Nevada made sports gambling legal in 1949, the ten percent cut the federal government received immobilized the industry’s growth. As sports leagues continued to argue based on integrity, they were fortuitously handed more and more examples that reinforced their argument. Whether it be baseball’s Pete Rose scandal or leaked point shavings spanning three decades, the leagues lucked out. Following these events, the Federal Wire Act of 1961 was passed, making it unlawful to place bets or share information regarding them through wires across state lines. Momentum seemed to be stymied until studies in the 1970s made it absolutely apparent just how much the American public supported sports gambling. Upwards of 80 percent of citizens supported it in some form. However, with money and influence, the sports leagues were too much, and the PAPSA decision handed out in 1992 made sports betting illegal on a federal basis. Following this, continued pressure from sports commissioners such as David Stern of the NBA and Rob Manfred of the MLB kept the league’s grip on the industry tight. In the end, however, it would be the millions of avid sports gamblers across the nation that would get the last laugh after the Supreme Court repealed PAPSA this summer.
What About the People?
Public Support is on the Rise
Lost in all the legal jargon of the past century was the comprehensive support sports gambling enjoyed from the U.S. populace. By all accounts, what truly stopped the legalization movement was the sports leagues’ fear that legalization would cut into their own earnings and not bring enough to the table to compensate for it. While these sentiments can certainly be justified from a business perspective, the league’s stubbornness in this matter has shortchanged and alienated their millions of fans. For years, most Americans have approved of sports betting, and a recent poll in 2017 showed that 55% of participants approved of sports gambling. What’s most intriguing for proponents is the significant approval sports wagering receives from the youth, the future of the country. More studies from 2017 showed that 62 percent of people between 18-49 approve legalization of sports gambling while only 46 percent of those over 50 approve of it. For those who believe that the country could be on the cusp of nearly universal support in the short future, these various statistics may serve as compelling confirmation.
Change on the Horizon
Theories behind this shift are surely aplenty, but perhaps the most foolproof comes ironically from the sports leagues themselves and their deviation from their own century-long norm. Recently named NBA commissioner Adam Silver has publicly championed sports gambling, and the MLB has partnered with a company that tracks sports wagering. Additionally, the NHL has recently drafted an expansion team located in Las Vegas, and the NFL’s Oakland Raiders are also scheduled to relocate to Vegas in 2019. For those underestimating the significance of these shifting sentiments, one can look back at just how powerful the sports leagues’ prestige was in banning sports betting in the ’90s.
Other Factors to Consider: At Home and Overseas
The Silent Beneficiaries
Long starving for some cash flow, Native Americans benefit more than any other group from gambling casinos. Many tribes today struggle to get by, and the influx of revenue generated from casinos goes a long way in keeping them afloat. In 2009 alone, Indian reservation gambling generated about $26.5 billion in revenue, more than Atlantic City and Las Vegas combined. Tribes have long experienced a low quality of life, and employment opportunities granted through casino ventures are, in some cases, the difference between life and death. Although Indian reservations receive $4 for every $10 Americans spend at licensed casinos, these numbers plummet for tribes not located in densely populated areas. For this reason, it is pivotal that casinos are given the incentive to grow and expand. Given that many casinos have encouraged more and more Native Americans to become politically active and repair their relationships with non-Indian people groups, Native Americans are sure to continue using their voice and newfound political leverage to influence politicians to continue expanding the gambling industry in the future.
The State of Gambling Abroad
In many ways, especially economically, Europe operates as a single de facto state; yet, this isn’t exactly the case for gambling. There isn’t any standard regulation that applies across Europe as individual jurisdictions are given the discretion to apply their own rules and regulations. Of all the states, Italy’s rules are by far the laxest. This may speak to leading all countries when it comes to gross revenue accrued through gambling, leading at 18 billion euros. The United States should closely observe the profound impact sports gambling has had on the European economy. Sports gambling serves as a plurality of all gambling revenues in Europe, topping off at 37% of all earnings, significantly higher than second-place online poker. The U.S. has long been seen as Europe’s biggest imitator, and given the towering profit realized from sports betting on the continent, it is no surprise that the U.S. is once again following their big brothers’ footsteps.
It’s the Economy Stupid!
Back on U.S. soil, Nevada itself serves as a prototype of what officials can expect when online casino betting is given the tools necessary to take off. With the generation of $248 million in revenue in 2017 alone, it is now time for all states to follow its lead. The more numbers that come in, the more they prove just how large potential tax revenue could be. Even with the splitting of the dividends by multiple parties, all stand to benefit in some capacity or another. As said earlier, Rhode Island, a meager state in the upper northeast, is already witnessing the astonishing results of sports betting. Even if the states own figures seem to be a bit overconfident, the frenzy surrounding the industry is hard to ignore. Aside from the hundreds of millions of dollars of unrealized revenue, sports gambling has the ability to create jobs in the state casinos, restaurants, and hotels. As much as local politicians claim they care about their states economy, squandering the underlying demand for sports betting is doing a great disservice to their very constituents.