Boom of Gambling in the USA

Gambling has existed in what we now call the USA since long before the first Europeans landed on American shores. Early settlers brought thousands of years of gambling tradition only to discover the indigenous people already had their own.

Since the formation of the first governments, the relationship of America to gambling has been checkered. Many forms of gambling were first discouraged and then prohibited by successive authorities.

Though it has always been present, gambling in most states was illegal throughout most of the 19th and 20th centuries. In the 1930s, several states began allowing horse racing and charitable gaming, but only Nevada legalized gambling in casinos.

It was in the 1970s, less than 50 years ago, that more states began changing regulations to allow gambling. This started with around a dozen states who launched their own sponsored lotteries.

New Jersey became the first casino state outside of Nevada when it brought gambling to Atlantic City in 1978. Over the next two decades, Colorado, Illinois, Indiana, Iowa, Louisiana, Michigan, Mississippi, Missouri, and South Dakota all followed.

Today, the legality of gambling is still determined by individual state laws. Lotteries and charitable gambling are permitted in most states, while casino, track, and sports betting are allowed in roughly half.

In 2023, only 15 states have, so far, legalized online gambling, though offshore providers continue to access the US market. However, many states are beginning to wake up to the advantages of regulating and taking revenue from the online industry.

Variations of laws

In terms of casino and sports betting, both land-based and online, different states currently offer different combinations of legality. These fall roughly into four categories:

  • Fully permitted

11 states currently allow gambling in all its forms including charitable, lotteries, casino, sports betting, racetrack, and online. These are Delaware, Illinois, New Jersey, Pennsylvania, West Virginia, Rhode Island, Indiana, Iowa, Indiana, Louisiana, Michigan, and New York.

  • Online permitted

Though there are exceptions, most states which allow online gambling also allow sports betting and casinos. In addition to the fully permissive states, these include California, New Hampshire, Nevada, and Florida.

  • Not online

Arkansas. Maryland, Ohio, Colorado, Mississippi, South Dakota, and Washington all currently allow sports betting and casino gambling, but not online.

Virginia, New Mexico, Tennessee, Arizona, Kansas, Montana, North Carolina, and Washington, D.C. allow only offline sports betting. Maine, Massachusetts, and Missouri allow only land-based casinos.

  • No gambling

Hawaii and Utah are the only US states in which no gambling of any kind is currently permitted. Tennessee permits lotteries and sports betting, South Carolina only lotteries, while Alaska permits only charitable gambling unless on tribal land.

Impact of legalization

It only takes a look at the 2021 state gambling revenue figures to see the impact these different permissions make. At $13.5 billion, Nevada with its Las Vegas playground is unsurprisingly the biggest earner, but then it gets interesting.

Next on the list, by a significant margin, are New Jersey and Pennsylvania, both earning over $4.5 billion. Both these states fall into the “fully permitted” category after making online gambling legal in 2013 and 2017 respectively. 

Indiana, New York, Michigan, Mississippi, Louisiana, and Ohio earned more than $2 billion, with the top three all fully permissive. Of the top ten earning states, only Nevada, Mississippi, and Ohio do not currently allow online gambling.

Case study

While Nevada, home to the world’s most famous casino town, speaks for itself, Pennsylvania offers a great case study. The state started slowly, legalizing track betting in 1959, introducing lotteries in 1971, and allowing bingo from 1981.

In 2004, Pennsylvania legalized slot machine casinos as a way of propping up struggling horse racing tracks. This opened the door to pressure for wider casino permissions and a progressive attitude towards gambling in the state.

Since 2010, when it legalized casinos with table games, Pennsylvania has grown to become the second-largest casino state after Nevada. On October 30, 2017, the Truck Stop and Satellite Casino Bill was passed, and online gambling was also made legal.

As BonusFinder points out, online casinos have become prominent in Pennsylvania since online gambling was legalized, and revenue has boomed. When federal sports betting regulations were eased in 2018, the sky became the limit for gambling in Pennsylvania.

In 2022, Pennsylvania reported record gambling revenues exceeding $5 billion, an increase of $1.2 billion from the previous year. Rising at that rate, Pennsylvania has become the shining example of what can be achieved with a progressive gambling attitude.

Who’s next?

The boom for gambling in Pennsylvania and other permissive US states isn’t just good news for private businesses and citizens. With tax rates of up to 36% imposed on gambling, a thriving industry generates billions of dollars for state treasuries.

Pennsylvania might be one of the first, and most successful, in celebrating the growing US appetite for gambling. With such huge potential earnings, however, particularly from casinos and online gambling, it is unlikely to be the last.

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