Navigating Barriers to Online Casino Growth in the Eight Legal U.S. States

Expansion for online casinos in the U.S. is no longer driven by new legislation alone. Operators must instead navigate political barriers and economic arguments as the pace of iGaming legalization has slowed considerably. Real money iGaming stands legalized in just eight states, with several others having failed to advance bills amid opposition from land-based casinos and unions, according to reporting by SBC Americas.

Current Standstill and Sources of Opposition

The eight states with legal real money iGaming are Connecticut, Delaware, Michigan, New Jersey, Philadelphia, Rhode Island, Maine, and West Virginia. Illinois, Indiana, Maryland, New York, and Virginia have all failed to advance legislation. Land-based casinos have warned that online casinos could cause revenue losses and put jobs at risk. These cannibalization fears have long blocked legislation and explain why many states require online platforms to tether to brick-and-mortar casinos.

Operators face competition from unions and local governments protective of casino employment. The National Association Against iGaming includes members from religious leaders, problem gambling campaigners, and prominent casino operators including Churchill Downs, Cordish Companies, Monarch Casino, Gaming and Leisure Properties Inc., and the Laguna Development Corporation. Legislative efforts now center on responsible gambling guardrails rather than market expansion, raising compliance costs and prompting operators to pause new market plans.

Pathways Through External Pressure and Targeted Approaches

Sports betting continues to spread and may serve as a Trojan horse for add-on iGaming provisions once a mature sportsbook market exists. States with tribal or hybrid structures may prove easier to sway, as seen when Maine became the eighth state to legalize online casinos earlier this year through a tribal bill. There, four Wabanaki tribes gained exclusive iGaming rights at an 18% tax rate.

Crackdowns on sweepstakes casinos are accelerating. In 2025, California, Connecticut, Montana, New Jersey, and New York moved to restrict the model. This year, Indiana, Iowa, Maine, and Oklahoma enacted legislation, with pending bills in Louisiana, Maryland, Minnesota, Tennessee, and Virginia. Prediction markets regulated by the CFTC are viewed as a threat to sports betting tax revenue. Richard Schwartz, CEO of Rush Street Interactive, has argued this could push states toward online casinos as a more stable revenue source.

External pressures from prediction markets or offshore casinos that erode state tax bases may force legislatures to reconsider iGaming to protect revenue. Operators should deepen their presence in the existing eight markets through retention, cross-selling, and VIP segmentation while building alliances with tribes, offering revenue-sharing to unions, and reframing the cannibalization debate with evidence of overall market growth. This is the scenario industry leaders increasingly expect.

Reporting: SBC Americas

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