Online gambling in the United States has never been a single story. It’s a patchwork quilt of state policies, federal statutes, tribal compacts, and legal gray zones. For players, operators, and lawmakers alike, the rules shift depending on where you sit and what you’re trying to wager on.
As of 2025, the American market has matured considerably since the early post-PASPA scramble of 2018. Yet the divisions remain sharp: while sports betting has swept the nation, online casinos are still confined to a handful of states, and sweepstakes casinos continue to occupy a curious middle ground that blends entertainment with contest law.
Let’s unpack the state of play.
Federal Law: Guardrails Without a Green Light
At the federal level, the United States still hasn’t passed legislation expressly legalizing online gambling nationwide. Instead, a few long-standing statutes frame the boundaries:
- Unlawful Internet Gambling Enforcement Act (UIGEA, 2006): UIGEA doesn’t criminalize gambling itself but restricts banks and payment processors from handling transactions tied to unlawful online wagering. It’s a financial choke point, not a blanket ban.
- The Wire Act (1961): Originally aimed at organized crime and bookmaking, the Wire Act prohibits transmitting bets across state lines. Courts and DOJ memos have narrowed its application over the years, but it still complicates interstate online casino or poker liquidity.
- Indian Gaming Regulatory Act (IGRA, 1988): Governs gambling on tribal land, and has become increasingly relevant as tribes negotiate compacts to enter digital markets.
The Supreme Court’s Murphy v. NCAA (2018) ruling striking down PASPA (the Professional and Amateur Sports Protection Act) is what set the modern era in motion. By lifting the federal ban on sports betting, the Court opened the door for each state to decide for itself.
Online Casinos: Seven States and Holding
Despite the success of sports betting, online casinos — offering slots, blackjack, roulette, and live dealer games for real money — remain restricted. As of September 2025, only seven states have full iGaming markets:
- Connecticut
- Delaware
- Michigan
- New Jersey
- Pennsylvania
- Rhode Island
- West Virginia
Why So Few?
The slow growth comes down to three factors:
- Politics: Sports betting has been easier to sell politically, tied to professional leagues and taxed as a new revenue stream. Online casinos trigger deeper opposition tied to problem gambling fears.
- Industry Pushback: In some states, commercial casinos and tribal operators resist iGaming because they fear cannibalization of brick-and-mortar revenue.
- Constitutional Barriers: In states like Maryland, any expansion requires a voter referendum, creating a multi-year delay.
That said, the financial upside is undeniable. In New Jersey alone, online casinos have generated over $7 billion in revenue since launch, outpacing sports betting by a wide margin. Michigan and Pennsylvania are following similar trajectories.
Online Sports Betting: The National Winner
By contrast, online sports betting has gone mainstream. Roughly 30 states — plus Washington, D.C. and Puerto Rico — now allow mobile sports wagering.
States Driving the Market
- New York: One of the largest markets, exceeding $20 billion in annual handle.
- Ohio: Legalized in 2023 and quickly scaled into a multi-billion-dollar market.
- Massachusetts & North Carolina: More recent entrants expanding access across the East Coast.
Sports betting’s cultural normalization is also unique: major leagues now partner directly with sportsbooks, broadcasters display live odds, and betting has become part of the entertainment product itself. That political acceptance has helped it spread far faster than casino gaming.
Sweepstakes Casinos: The Quiet Majority
For residents in states without real-money iGaming, sweepstakes casinos have emerged as an alternative. These sites operate under U.S. sweepstakes law: players purchase or receive virtual “Gold Coins” for fun play, while “Sweeps Coins” function as entries into promotional contests that can be redeemed for cash prizes.
Where Are They Legal?
- Sweepstakes casinos are legal in 46–48 states, with Idaho and Washington generally excluded, and some restrictions in Nevada.
- This near-nationwide availability has made them the default “online casino” option for millions of U.S. players.
Controversy and Crackdowns
In 2025, regulators in states such as Connecticut and Michigan issued cease-and-desist orders to platforms that blurred the sweepstakes model into something closer to unlicensed real-money gambling. Enforcement is patchy, but it signals growing scrutiny.
State-by-State Legal Snapshot
Here’s how things look at a glance:
| State | Online Casino (Real Money) | Online Sports Betting | Sweepstakes Casinos |
| Connecticut | Yes | Yes | Yes |
| Delaware | Yes | Yes | Yes |
| Michigan | Yes | Yes | Yes |
| New Jersey | Yes | Yes | Yes |
| Pennsylvania | Yes | Yes | Yes |
| Rhode Island | Yes | Yes | Yes |
| West Virginia | Yes | Yes | Yes |
| 20+ other states | No | Yes | Yes |
| Idaho | No | Limited/No | No |
| Washington | No | Retail only | No |
| Nevada | No (casinos remain retail) | Yes | Partially restricted |
Expansion on the Horizon?
A few states are worth watching:
- Ohio: Bills are active to authorize online casinos and expand the iLottery by 2026.
- Maryland: A proposed online casino referendum could reach voters in 2026.
- Virginia: Still in exploratory talks, but potential in the medium term.
By contrast, states like Iowa and Maine have seen their efforts stall, showing how politically fragile these initiatives can be.
Consumer Protection and Social Pushback
Even as markets grow, criticism is mounting:
- Addiction concerns are front and center. Connecticut has reported spikes in calls to gambling helplines since legalization.
- High-profile losses — such as a Michigan woman who lost $2 million in six months — have sparked debate in Ohio over setting aside a portion of tax revenue for addiction programs.
- Legal pressure is mounting on operators: Baltimore sued DraftKings and FanDuel in 2025 for alleged predatory marketing.
These tensions echo Europe’s regulatory trajectory, where once-liberal markets are now imposing strict advertising and affordability rules.
Where Players Can Stay Informed
For U.S. players, the challenge is keeping track of this evolving landscape. Laws change annually, and enforcement actions can shift what’s considered safe or legal.
Sites like Casino Whizz and PlayUSA offer state-by-state breakdowns and guides, providing a useful snapshot of where online casinos are available and how sweepstakes models fit into the picture.
Final Take
The U.S. online gambling market in 2025 is best described as divergent growth. Sports betting is everywhere, online casinos are still rare, and sweepstakes casinos remain the fallback option in most of the country.
Expansion is coming — Ohio, Maryland, and Virginia are next in line — but the social and political pushback is just as strong. Players and policymakers alike are navigating a balancing act between economic opportunity and social responsibility.
The result is a dynamic industry where the map looks very different depending on which border you cross.
