The online gambling landscape in the US can be difficult for consumers to navigate, with states having the autonomy to decide on their own regulations. This has resulted in a fragmented industry where many states offer online sports betting and only seven with legal online casino operations.

While bettors in Delaware, New Jersey, Pennsylvania, West Virginia, Connecticut, Rhode Island, and Michigan can access state-licensed operations, gamblers in other states must look at offshore alternatives.

Online gambling expert Matt Bastock provides a simple solution on how to find casino apps in the US by comparing operators to find those with the best bonuses, selection of games, and security protocols to keep consumers safe and entertained. With the online casinos being illegal in several US states, players are freed up to explore the best licensed offshore sites and apps.

The following US gambling laws provide the industry with a regulatory framework that they must adhere to or face strict consequences.

Federal Law

Federal Law prohibits gambling unless state regulations supersede it. Because state regulations cover most operations, Federal Laws typically focus on international and interstate gambling, as well as financial transactions.

The 1992 PASPA (Professional and Amateur Sports Protection Act) prohibited sports betting in most states, but a 2018 Supreme Court decision reversed the ruling, and many states moved quickly to legalize it. This changed the landscape of online betting in the US, and regulations could pave the way for other markets, including online casinos, to be legalized.

The 1961 Wire Act prohibits interstate gambling (unless specifically agreed upon) and focuses on sports betting.

The 2006 UIGEA (Unlawful Internet Gambling Enforcement Act) prohibits online gambling operators from accepting illegal betting payments. This outlaws the processing of payments by financial institutions to illegal online operations, making it more difficult for people to bet online in prohibited states. 

State Law

State laws vary, with each state employing a dedicated regulatory body to oversee operations or prohibitions. Online casinos must follow state laws regarding the operation and licensing, with only the seven previously mentioned states allowing online casino betting.

The US State Gambling Regulatory Bodies:

• Arizona Department of Gaming
• California Gambling Control Commission
• California Bureau of Gambling Control
• Delaware Division of Gaming Enforcement
• Illinois Racing Board
• Illinois Gaming Board
• Kentucky Horse Racing Commission
• Maryland Racing Commission
• Michigan Gaming Control Board
• Missouri Gaming Commission
• Minnesota Alcohol and Gambling Enforcement Division
• National Indian Gaming Commission
• Nevada Gaming Control Board
• Nevada Gaming Commission
• New Jersey Division of Gaming Enforcement
• New Jersey Casino Control Commission
• New York State Gaming Commission
• Ohio Casino Control Commission
• Pennsylvania Gaming Control Board
• South Dakota Commission on Gaming
• West Virginia Lottery
• Washington State Gambling Commission

State regulatory bodies issue licenses and ensure state law compliance. They also monitor the gambling industry to prevent potential illegal activities from taking place and decide how much operators are taxed and how the money is allocated.

The allocation of tax revenue typically includes a portion going towards education programs about responsible gambling, with other beneficiaries including state education systems, local infrastructure, and other local causes.

The difference between regulations in states can cause confusion and uncertainty for consumers and operators. However, many are using the example of states with successful online casino industries to mount the case for legislative changes.

Tribal Gaming Laws

Tribal gaming regulations are another law that operators and consumers must consider, with Native American tribes often gaining permission to operate gambling establishments on tribal land. This has been extended in some cases to include online gambling when the state and tribes agree to a compact.

There has been some backlash to the legalization of online gambling operators working on tribal land, with opposition making the point that consumers can access online betting sites and apps from anywhere in the state, and this goes against the original agreement.

Interstate Compacts

Interstate compacts are relatively rare concepts because of the limited number of US states with legal online casino betting. These agreements allow operators to share customer bases across state lines for online gambling markets, including poker. They help to keep player numbers up to keep businesses viable.

Taxation and Licensing

One of the biggest reasons that more states are beginning to consider regulatory changes for online casinos is the revenue they can create for states. As well as creating jobs, the tax revenue generated by online gambling operations can be invested back into local communities.

States also generate revenue that can go towards the regulation of the industry through license applications and renewal fees. Licensing requirements also ensure that operators are fit to provide a service to consumers and have protections in place for player safety and security.

Responsible Gambling Regulations

Responsible gambling regulations are also implemented by states to protect potentially vulnerable customers. 

States demand that operators have measures in place to promote responsible gambling and mitigate the risk of players losing more than they can afford.

Self-exclusion programs are a popular way of doing this, with gamblers able to sign an agreement with operators that prohibits them from playing. These options can be in place across a single operator or work across multiple licensed betting sites to ensure it is effective.

States can also impose limits on how big a wager players are able to make, as well as how much they can deposit into an active betting account.

Betting sites face regular audits to ensure fair play and that customer data and funds are handled correctly. Sites are also encouraged to implement on-site tools that allow players to monitor their spending and playing habits. Operators are also encouraged to monitor betting to make sure they are in control.

AML and Counter Terrorism Regulations

Operators are also required to follow anti-money laundering and counter terrorism measures, including KYC (know your customer) protocols. 

These require players to provide detailed information to minimize the risk of using betting sites to launder the proceeds of crime or fund terrorist activities.