Why Don’t More States Legalize Online Casinos?
Entering the latter half of 2026, nearly 40 states have legalized some form of sports betting. While not all of these states offer online sports betting, the majority of them do. And even the ones
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Yet, despite the United States’ wider-spread embrace of legal sports betting, it has not shown the same affinity for domestic online casinos. At this writing, just eight of 50 states have legalized digital casinos: Connecticut, Delaware, Maine, Michigan, New Jersey, Pennsylvania, Rhode Island, and West Virginia. This runs in stark contrast to basically 80 percent of the country having greenlit some form of sports gambling.
What’s more, the two industries are increasingly tied together. Sports betting legislation among holdout states is now often proposed in tandem with online casino stipulation. With so many sportsbooks having casino sections of their own, in fact, many end up being shocked they can’t use the latter while having access to the former.
All of this creates confusion—ambiguity that is rooted in a lack of not just information, but overall clarity. So, why don’t more states outright legalize online casinos? The answer probably isn’t what you think.
Brick-and-Mortar Casinos Have Something to Do with It
For so long, the absence of broader online casino legalization was chalked up to concern for the brick-and-mortar casino industry. Officials didn’t want remote gambling to replace the in-person experience. Tourism industries in places like Las Vegas and Atlantic City would crater.
That concern endures now to an extent. But it no longer carries as much weight. The COVID-19 pandemic changed consumer behavior forever. Brick-and-mortar casinos still don’t enjoy the same level of foot traffic they did before nearly one decade later.
When people were forced to steer clear of public spaces, they changed their habits across every spectrum. They are more likely to shop, eat, and yes, even gamble from their phones rather than take trips to casinos. This is especially true in areas that do not have casino floors within reasonable driving distances.
The proliferation of online sports betting has further advanced this dynamic between wagering and location. No, not every casino gambler is a sports bettor. But there is nevertheless a significant overlap in the two demos. Many are content to just bet on sports online without digital casinos available to them.
This points to brick-and-mortar casinos having less of influence over online laws in the U.S. And that raises the question: What other dynamics are at play?
The United States Views Online Casinos as More Problematic Than Sports
Even though sports betting online and playing casino games online are seemingly one in the same, officials in the United States are clearly more hesitant to embrace the latter. Their reasoning also happens to be part of the appeal of the casino industry: It’s bigger.
Casino gaming tends to happen at a larger scale. The combination of classic table options, virtual slots and original-themed games appeals to a broader audience. With sports betting, you need to have background knowledge on, if not be an expert in, the teams and events on which you wager. Online casinos draw in more casual customers—a demographic that eclipses sports betting fans in scope and scale.
On top of all that, government officials are also worried about monopolies forming. Sportsbooks like DraftKings and FanDuel already have a stranglehold on their respective market. What happens if they branch out into online casinos?
Consider what the Associated Press’ Wayne Perry wrote on this matter back in 2023:
“Internet gambling ‘stands out as the most lucrative revenue source from any gaming launch in history, and New Jersey is ‘exhibit A’ for its success,’ said Howard Glaser of the internet gambling technology company Light & Wonder. He predicted dozens of states will adopt it in the near future.
However, Chris Krafcik, managing director of the Eilers & Krejcik gambling analytics firm, said some states may be hesitant to forge ahead with internet casinos, which some lawmakers may view as a more serious, high-stakes form of gambling than online sports betting. Another factor is competition from online giants like DraftKings and FanDuel that control nearly half the online casino market in the U.S. Krafcik predicted ‘only a very small number of states’ will legalize online casinos by the end of 2027. ‘Online casino has always been a tough sell,’ Krafcik said.”
A few years later, it turns out Krafcik’s stance was the correct one. It isn’t 2027 yet, but we’re not that far away. And very few states have approved more formal online casino legalization in the time since Krafcik’s comments.
Interesting still, the stagnancy in legalization persists despite a current presidential administration that’s against rigid regulations. Prediction markets and sports betting markets alike are thriving since Donald Trump took office, again, in 2024. Yet, there is still little to no movement at the state levels when it comes to online casinos.
Couple this with the concern the online casinos make gambling too accessible to simply too many people, and not only do you understand why legalization hasn’t taken off; you start to realize nothing’s on the verge of changing anytime soon.