US Gambling Industry: How iGaming Can Benefit Individual States

US Gambling Industry How iGaming Can Benefit Individual States

Across the United States, online casino revenues are lost to unregulated offshore providers. If more individual states would consider legalizing iGaming, the trend would reverse, and states could profit from the industry. Gambling is a widespread activity in the United States, but not in an online format. State and federal bans have left the option open in limited areas, with little access for most citizens.

Legalized gambling could help the US tremendously if lawmakers were willing to enact legislation to offer online activity. The process has been slow-going, especially in conservative Republican states. Officials seem to be less open to online gambling than land-based formats.

The Current State of Affairs

As of 2023, 48 states in the US offer a type of gambling. This includes lottery options, commercial casinos, tribal casinos, etc. Hawaii and Utah are the only states that do not offer any gambling, with activities strictly banned.

Forty-four states feature some casino options or charitable gaming. Only 33 states offer commercial casinos, including land-based, riverboat venues, parimutuel betting, and online or sports betting. Online casinos are even less frequent, with less than ten states featuring a regulated market.

Gambling Revenues from Traditional Casino Gaming

The American Gaming Association (AGA) keeps track of the gambling industry in various ways, including using a revenue tracker for earnings. The AGA reported that in 2022, the US earned over $60 billion in revenues. In 2021, the total was just over $53 billion. The totals are increasing at a rapid rate for commercial gaming.

These figures do not include tribal casinos, with over 500 in operation. It also does not include illegal funds that are spent offshore with unregulated sites. During 2022, a total of 30 casinos saw growth out of the 33 in operation.

Tribal Casino Gaming Insight

In the US, 29 states have gaming compacts with Native American Tribes. These compacts allow the tribes to offer casino gaming in exchange for some type of payment to the state. Each operator is allowed to offer casino services based on the Indian Gaming Regulatory Act of 1988 (IGRA).

Tribes can offer Class III gaming on their land and work with US authorities to offer services. The National Indian Gaming Commission releases gross gaming details, with 2022 bringing in $40.9 billion. This was a more than 4% increase from the previous year.

Such compacts are set for a specific period and must be updated when the end date draws near. Recent compact updates have included online gaming as well as sports betting. Tribes want to stay on trend and offer the latest gaming options to their players. The only way to do so is to update the compacts held with the state.

What About Online Revenues?

Only a handful of states can offer online casino gaming; dozens are included in the online sports betting business. New York has become a top state in the sports betting world, bringing in $16.6 billion in wagers for 2022. Operators in the state pay a high tax of 51%, and last year alone, NY contributed $1.4 billion in taxes.

An additional $200 million was paid in licensing fees. The state’s revenues grew by over $900 million last year alone. This is just one example of how online gambling regulation can lead to major revenues for individual states.

What are Offshore Casino Sites?

Because online gambling is relatively new in the United States on a regulated level, most players have yet to learn the difference between an offshore site and a licensed provider. An offshore site is an online casino operating without licensing in a particular state. The online operator does not adhere to regulations or pay taxes.

With legalized sites, players are better protected. The gaming regulator can ensure that all winnings are paid, and games are fair. When you play with an unregulated site, you risk having your personal information sold to third parties, winnings can go unpaid, and games may give the casino an unfair advantage.

Overall, regulation creates a safe environment for gamers. There is less of a chance to experience fraud or online scams. The state you play in that offers regulation ensures greater support to fight addiction and other issues. It’s a better environment, in general, that keeps the player in mind.

Offshore sites also do not pay any fees such as licensing or taxes. This removes state money, which is used for educational needs, community projects, and more.

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.