The Legalization and Incredible Expansion of Online Gambling
While gambling has always been a touchy subject in many states, the pastime is gaining more fans daily. The benefit of gambling in terms of state income is also becoming more apparent as more states climb on board.
Currently, seven US states legally allow online gambling: New Jersey, Nevada, Delaware, Pennsylvania, West Virginia, Connecticut, and Michigan. And with more states legalizing the activity, the industry is expanding rapidly as more players log online.
Read on as we outline its incredible expansion and where it’s predicted to go in the future.
Legalization of Online Gambling
The first step in the massive expansion of the online gambling scene in the US comes down to a simple way of interpreting the law.
In 2011, the Department of Justice changed the government’s view regarding how far the Wire Act of 1961 could reach. This change in interpretation meant that the act could only apply to sports betting—not online casinos or gambling.
This revolutionary news meant that states could individually decide and regulate any online gaming or gambling within the state. Three states (Nevada, New Jersey, and Delaware) quickly decided to legalize online gambling and wrote their own legislation for it between 2012 and 2013.
Pennsylvania joined the trend in 2017 with the formation of the Pennsylvania Gaming Control Board and the passing of H271 into law on October 26. This law legalized online gambling in the state, poker, and multiple other gambling options. However, the first online casino only became operational in the state in 2019—and Pennsylvania online casinos have brought in record revenues each year since then.
West Virginia legalized online play in 2019, the same year Philadelphia players logged online. Two years later, in 2021, Michigan and Connecticut also decided to allow online casinos within the state.
Opposition to Online Gambling
While six states have now decided to legalize online gambling, a new decision by the Department of Justice in 2019 might cause chaos. That year, the DOJ announced it was changing its view of the Wire Act of 1961 back to its pre-2011 perspective.
Essentially, this means that individual states no longer have the power to decide whether online gambling is legal. Instead, that decision will be—as it was before—made on a national level and merely enforced by individual states.
However, little has happened since the announcement due to little clarification on what it means for states that have already legalized the pastime. Also, since Michigan legalized online gambling in 2021, it is clear there have been no real implications concerning this announcement.
One reason there has been little implication from the announcement may be the size of the industry since legalization. As many always say: the proof is in the pudding, and this has certainly rung true for this industry.
The Incredible Expansion of Online Gambling
Because online gambling only really began in the US between 2012 and 2013, there was little expectation for the market to grow significantly in a short space of time. In fact, by 2019, the legalized states had yet to generate a turnover of even $1 billion in the year.
This changed suddenly in 2020 when the COVID-19 pandemic hit the world and almost every country initiated a lockdown. Due to being forced to stay home, many people could not visit their favorite casinos, and as an alternative, they registered online player accounts.
Because of this, iGaming revenue in the US reached over $1.5 billion in 2020—with over $500 million coming from Pennsylvania alone. In 2021, this revenue increased even more—crossing the $3.5 billion mark. Of this, the keystone state generated over $1 billion.
Another clear indicator of the growth of the online gambling industry is the number of registered player accounts in the country. In 2016, a measly 3% of 4.2 million people surveyed said they gamble online. This equates to around 126,000 players.
However, in 2022, an estimated 10 million players now have registered accounts with one or more online casinos. This staggering growth in just six years equals around 7,836%—or 1,306% per year since 2016.
If these figures don’t speak enough about the meteoric rise of online gambling, the fact that the Pennsylvania Gaming Control Board has issued licenses to 10 online casinos in just three years should. This means that the market has had enough demand to accommodate the birth and growth of all these casinos in a very short span of time.
The Future of Legalized Online Casinos
While there is still some concern regarding the government revoking its progressive view of the Wire Act, many remain optimistic that online casinos in the US are here to stay. After all, they are already working so well in the states they are established in.
Adding to this is the growing list of states that are currently in the process of considering the legalization of online gambling. These include California, Indiana, Illinois, Massachusetts, and New York.
Should these states approve online gambling, the industry will take a further massive leap forward.
Online gambling has previously been seen as something that should be strictly avoided in the USA. And many states still hold firmly to this view and will seemingly never allow online gambling.
Thankfully, the tides have begun to change, and more states have already legalized online gambling or are doing so. This has led to drastic growth in the industry and created more opportunities for players throughout the country to enjoy this pastime from the comfort of their homes and mobile devices.