What is the situation regarding online gambling within the United States?

Given how prevalent the use of the US Dollar is when it comes to looking for new player bonuses at online casinos, or the sheer number of casinos that offer US Dollars as one of their deposit options when it comes to signing up at a casino, you would assume that within the United States, there must be a burgeoning and healthy scene when it comes to online gaming.

This is further reinforced when you consider some of the massive progressive jackpot slot games, such as Mega Moolah, offer US Dollars as one of their primary currency options (alongside the likes of the British Pound, Euro, Canadian Dollar and NZ Dollar) and especially when you consider that in Canada and throughout Europe, Mega Moolah is freely available to play (and highly popular).

Yet the availability of the US Dollar as a payment method, a way to play popular slot games and as a way to run your account, compared to how accessible online gaming is within the United States, that is one of the most paradoxical and confusing things about the modern online gaming industry.

So, in this article, we are going to try and give you the lowdown on the status of online gaming, including slots, poker, scratchcards and other similar games, within the United States. How it differs from state-to-state and why the situation is, at present, increasingly fluid and set to change over the coming years.

The current state of online gambling in the United States

It is fair to say that the laws surrounding gambling in the United States are extremely confusing. The first thing to note is that gambling is legal under U.S. federal law, but there are massive restrictions in place, particularly pertaining to inter-state and online gambling.

Furthermore, the issues are made even less clear by the fact that each of the states of the union can make up its own rules regarding many different forms of gambling. For example, in Hawaii, no form of gambling is legal, but in Illinois, you can bet on lotteries, at the racetrack, but not online. It is a similar story across each of the states, with each state having its own rules on what form of gambling is legal.

When it comes to online gambling though, there are just a small number of states that allow this particular form of wagering.

  • Delaware
  • Iowa
  • Nevada
  • New Jersey
  • Pennsylvania

In all other states, at the present moment in time, online gambling is not allowed, but that could be set to change.

The reason for that began back in 2013 and with the state of New Jersey.

New Jersey's key role in changing the face of online gambling in the United States

In 2013, New Jersey's governors were looking at ways to increase revenue within the state and it soon became clear to them that by taxing online gambling and having a controlled and rationalised approach to it, the state could reap the benefits financially from allowing this form of gambling.

At this time, online gambling was banned across the whole of the United States, ostensibly following the events known in the industry as Black Friday (15th April 2011) when the three biggest poker rooms within the US were effectively closed down by the US Department of Justice.

New Jersey decided to take their case to the high court and in a landmark move, the high court agreed that it should be down to the individual state to decide whether they wanted to offer online gambling within its borders, although the court fell short of legalising online gambling across the country. That said, the ruling meant that each state in the union could now decide what to do regarding online gambling within its own borders.

Along with the likes of Delaware and Nevada, New Jersey was one of the first states to legalise online gambling in the form of casino gaming, sports betting and poker rooms. The move proved to be a success with over $3 billion worth of bets placed within five states that allow online gambling. A total of $194 million in tax has been generated by the industry and in New Jersey alone, $22.6 million extra has come into the state economy through online gambling.

It is these rosy financial figures which have led to a number of other states across the United States taking a much closer look at whether they could raise significant extra revenue by allowing online gambling within its borders. In addition to the five states listed above where online gambling is legal (Pennsylvania only joined this group in mid-2019), a number of other states are in the process of analysing or have started the process to allow online gambling within their borders.

Timescale?

The likelihood of more states joining the five that allow online gambling seems certain, but putting a timescale on when that will be remains problematic. Each state has its own legislative procedures to follow in order to legalise online gambling within its borders and the opposition to online gambling differs from state to state, which means whereas in some states it may be relatively easy to pass the legislation quickly, in others the moves may be blocked by appeals and other legal processes aimed at either delaying or even the cancelling making online gambling legal within that state.

As such, it is a somewhat muddled picture within the United States, which is something of a dichotomy as if you were to ask a hundred people a place famously linked with gambling then the likes of Las Vegas would likely come out top of the list.

The way things look at the moment, it does seem likely that several other states will soon offer online gambling to its citizens, but how quickly that happens and when they will actually be ready to do so, remains very much open to debate.

However, it may well pay US officials to do so quickly as the likelihood is they could be missing out on millions in tax dollars due to their inaction and due to the fact that there exists simple workaround for American players to gamble online illegally.

VPN's and the legalisation of Cannabis in the US

The fact you can use VPN software to 'trick' software into thinking you are logging in from a different state than where you actually are, can open up many online gambling opportunities for players, especially as some people may have more than one address, or have family living in another state where online gambling is legal.

It is incredibly difficult for authorities to police, not to mention expensive and time consuming to bring about any case against an individual. These facts mean that many Americans may well be using such practices to gamble online.

Some may wonder how is it possible that cannabis is legalised in many states but online gambling isn't?

Prior to 2018, marijuana was illegal across the United States, but a new rule allowed states to legalise the drug and tax it. Prior to this, no tax was raised from the sale of marijuana or cannabis products within the US but of the 7 states that do tax and regulate the industry the amount raised in tax has been huge.

  • Washington State - $319 million
  • California - $300 million
  • Colorado - $266.6 million
  • Oregon - $94.4 million
  • Nevada - $69.8 million
  • Alaska - $11 million
  • Massachusetts - $5.2 million

There are clear parallels here for the states to consider when it comes to online gambling and the effect legalising it could have for them. The boost in income generated by taxes from online gambling could be huge, particularly in states where there is a great interest in casino gaming and sports betting.

At the moment, the situation in the United States is still very fluid and changing from day to day. It is unlikely there will ever be a unified approach nationwide to online gambling within the United States, but it does seem that an increasing number of states will allow their residents to wager online in future.

And this is why so many companies are gearing themselves up to try and re-establish in a market that is basically the world's biggest gambling market. Mega Moolah would certainly benefit and the jackpot could easily break new records is American players were free to play!

Byline: This article was published by Mega Moolah expert Henry. Media and other enquiries.

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