Gambling is currently restricted in many areas of the United States. Many thrill-seeking Americans travel to different areas of the country, or even internationally, in hopes of winning big. According to the American Gaming Association, commercial casino gambling activities resulted in over $43 billion in gross revenue in 2019 and paid well over $10 billion in taxes to state and local governments.
Online gambling laws are much more complex and restrictive than the laws and regulations in place for physical and commercial casinos in the United States and tribal territories.
The Unlawful Internet Gambling Enforcement Act of 2006 was signed into law by then-president George W. Bush and sought to prevent the use of certain payment instruments, credit cards, and fund transfers for unlawful internet gambling. This bill, however, has been and continues to be scrutinized over the last few years.
Not only is online gambling a multi-billion dollar industry in the United States, but it's also growing rapidly. Should one choose to ignore the federal illegality of online gambling, they're usually agreeing to shady "Terms and Conditions" when they register to some of these off-shore websites.
This bill, which was signed into law to protect US players from these online casinos, has actually ended up hurting them. The lack of regulation has led to a "wild wild west" type of atmosphere. Over the past few years, individual states have begun to step in and prioritize the legalization and regulation of online casinos, seeing it as a possible revenue stream that could improve their finances.
As of 2021, 13 states have passed legislation that legalizes and legitimizes internet gambling in some way.
If you live in one of the other states or US territories not listed, you are still technically allowed to gamble online. Beware though, if you attempt to circumnavigate the location tracking on a legal state-regulated online with a VPN, these sites will quickly shut you down. The problem is finding a legitimate online casino that will accept your registration and wagers. More reputable online casinos will not let you access their website to even register. United States federal law enforcement would seek to prosecute and/or seize the online casino domain, not the thousands of individual players.
In July 2006, David Carruthers, the CEO of BetonSports, a company publicly traded on the London Stock Exchange, was detained in Texas while changing planes on his way from London to Costa Rica. He and ten other individuals had been previously charged in a sealed indictment with violations of US federal laws relating to illegal gambling. Federal statutes make it illegal to own an operation that offers services to United States residents. Carruthers was sentenced to 33 months in federal prison.
BetonSports founder and notable US citizen Gary Kaplan, was arrested later in the Dominican Republic in March 2007 and sentenced to 51 months in federal prison. He was also forced to forfeit 43.6 million in "illegal proceeds" made from the website's operation.
While precedents can certainly be set at any time, there is little to no documentation online of arrests of individual online gamblers in the United States. It is very unlikely to have ever happened, and it is very unlikely to happen in the future.
Proposition DD (House Bill 1327) was passed in November 2019, which effectively legalized and regulated sports betting both online and in-person in the state of Colorado. The proposition’s approval allowed the state’s 17 current casino operators to apply for licenses for physical or online sportsbooks, where bets can be placed on the outcomes of sports events.
The casinos have to pay a 10% tax on net proceeds, and a majority of the money will go toward Colorado’s water plan. It passed by a very slim margin, receiving only about 51% of the vote according to the Denver Post. High school sports, E-sports and individual amateur performance wagers remain illegal, but all other mainstream betting options are “fair game”.
As in most other states, players must be 21 years of age and located within the Colorado state lines for their online wager to be accepted.
The Bill is expected to increase state tax revenue by up to 29 million annually.
Unbeknownst to many Americans, Delaware’s legalized gambling dates back a little further than some of the newer states in this industry. They were exempt from the Professional and Amateur Sports Protection Act which passed in 1992 and have been offering sports betting services for decades.
Although these services were very primitive compared to the modernized sportsbooks and online casinos of 2021, the legality was there early on. While there is a smaller selection of online options in Delaware, expect for more to become available over time.
In June 2019, Illinois governor J.B. Pritzker signed an executive order legalizing and regulating sports betting within the state. By the summer of 2020, several online sportsbooks were fully operational and accepting wagers, with the first accepted wager being placed in March of 2020 by BetRivers sportsbook. As of February 2021, there are currently 5 online sportsbooks for residents of Illinois to choose from.
The 6th largest state in the US does have some restrictions, however. Players must be at least 21 years of age and wagers must be placed within state lines. Betting on in-state amateur teams, such as the University of Illinois or Northwestern, is strictly prohibited. Betting on your own sport as a player, coach, referee or other principle is also illegal for obvious reasons.
Due to the size of Illinois and the reputation of Chicago as a very sports-oriented city, one would assume that there is a bright future ahead for legalized online sports betting in the state.
Illinois’ sports betting total wagers topped $435 million in October 2020 alone and will undoubtedly continue to rise as more operators enter the market.
Indiana furthered cemented its status as a gambling-friendly state on April 25th, 2019 when the Indiana State Legislature passed act H 1015. This bill not only removed current physical casino restrictions but also legalized sports betting. While online casinos and poker are not currently permitted, online sportsbooks are completely legal and regulated by the Indiana Gaming Commission.
The restrictions are similar to that of other states in the US. Players must be 21 years old and must place any wagers within state lines. Your residency or home state remains irrelevant as long as you adhere to the geotracking guidelines.
Indiana is a friendly state for gamblers because it has a lower tax on casino and sportsbook revenue. This opens up many more options for bonuses and for players to receive loyalty rewards or “comp points”. It’s also completely legal to bet on in-state teams, such as Notre Dame or Purdue University.
As of February 2021, there are 15 online sportsbooks available to players within Indiana state lines to place wagers on.
Iowa is one of the more interesting states to legalize online sports betting. The history of gambling in the state includes a church picnic, a Catholic priest and an overzealous State Attorney General.
In 1971, a church picnic, which had been held annually for over 40 years, was raided by law enforcement at the direction of the Attorney General. The 8,000 attendees were sent home and Father Carl Ruhland was arrested for operating an illegal gambling operation. The picnic would offer small card games, a wheel of fortune and bingo as fundraisers for the church.
The public outcry was immense. Within a year, the Iowa Legislature passed a resolution to repeal the states ban on gambling.
On May 13th, 2019, SF 617 was passed and signed by governor Kim Reynolds. This made Iowa the 11th state to legalize sports betting. As of February 2021, there are 8 online sportsbooks currently operating and regulated by the Iowa Racing and Gaming Commission.
The same rules apply as most other states. Players must be 21 and make all wagers within the boundaries of the state lines.
In December 2019, Michigan governor Gretchen Whitmer signed a ground-breaking bill titled the Lawful Sports Betting Act which expanded many of the legal forms of gambling in the state. Online sports betting, online casinos, online poker and daily fantasy sports all became legal and regulated by the Michigan Gaming Control Board.
The expansion of legalized gambling is expected to produce $19 million in revenue to the struggling, economically depressed, rust belt state. Several online-based casinos began operations in January 2021. That number will surely rise in the next few months.
Unlike some other states, the only restriction is on high school sports. Players are free to wager on some of the United States’ largest universities which call Michigan home.
The well-known and long-standing company “Pokerstars” is the first online poker operation available in Michigan.
Surprisingly, Nevada is a little behind the times when it comes to online gambling of any type. While it is completely legal to gamble online, it is not nearly as popular or well-known as the physical casinos and sportsbooks on the world-famous Las Vegas Strip.
Nevada lawmakers signed AB 114 into law in 2013 which legalized online poker in the state. There are also several sportsbooks that offer applications that allow players to place wagers within state lines. Strangely though, there are no legal and regulated online casinos in Nevada at this time.
In December 2019, New Hampshire joined the handful of states that allow online sports betting. Regulation is overseen by the New Hampshire State Lottery and Division of Sports Wagering after the passing of bill H 480-FN.
While players are not allowed to wager on in-state teams or even in-state events, New Hampshire seems to be a little less restrictive than other states and allows gamblers as young as 18 to participate.
The first-ever bet was placed on December 30th, 2019 by governor Chris Sununu. Ironically enough, the bet was a New England Patriots Superbowl championship future, which was ultimately a loser as the Tennessee Titans defeated them just 6 days later in the AFC Wild Card round.
New Jersey so far has been the gold standard for legal and regulated online gambling in the United States. Dozens of online sportsbooks and casinos are currently jockeying for the highly coveted top spots in the densely populated state. The metro New York City area is currently home to over 20 million people. This has resulted in very generous complimentary bonuses given out to both new and loyal players.
After the supreme court ruling overturned the Professional and Amateur Sports Protection Act of 1992, New Jersey was the first state to act on the decision. Sportsbooks were in operation within months of the 2018 ruling and have not looked back since.
There are still some restrictions in place, however, as wagers must be placed within the state lines of New Jersey and gamblers must be over 21 years of age to try their luck. Wagering on high school sports or in-state collegiate events are also restricted.
Online casinos are also very popular in New Jersey and have generated over 1.4 billion in revenue since their inception. All online casino servers must be based within the city limits of Atlantic City, however, the casinos are open to any player within the state. There are currently 20 online casinos regulated and legal to play in New Jersey.
Gambling revenue has shattered expectations in the state, as many gamblers from outside New Jersey flock to the state line to place their wagers and then return home.
The New Jersey Division of Gaming Enforcement is the regulatory body in this state. Their mission states that they are present to protect public interest by maintaining a legitimate and viable casino gaming industry, free from the influences of organized crime, and assuring the honesty, good character and integrity of casino owners, operators, employees and vendors.
Pennsylvania, much like New Jersey, is one of the best states for online gambling. Online operations began in July 2019 and they currently offer online sportsbooks, online casinos and online poker.
Statute HB 271 was signed into law by governor Tom Wolf in October 2017 which legalized online casinos. This law, combined with the Supreme Court ruling in 2018, opened many gambling opportunities for residents of Pennsylvania. The Pennsylvania Gaming Control Board currently oversees and regulates over 20 online casinos and sportsbooks, and the list is growing year after year.
Several different sportsbooks were launched in Tennessee in November 2020 and it is currently a mobile-only state. There are no physical sportsbooks to legally place bets.
Tennessee does not have a gambling-friendly history, so it’s interesting that they are joining the national frenzy to legalize sports betting.
They do have a bit more restrictions than other states though. There is no live betting of collegiate sports allowed in any way. While you may bet on these contests before they start, live wagers are explicitly banned. Prop bets on collegiate sports are also banned. They also follow the normal regulations of other states, you must be 21 years of age and within Tennessee state lines for your wager to be accepted.
Virginia is the newest state to be added to this list, as they just recently began online sports betting operations in January 2021. The bill was signed in July 2020 and allows 18 licenses to various private corporations.
Interestingly, part of the bill also gives permission to 5 physical casinos to be open in different parts of the state. These casinos are expected to be opened by 2023. Virginia does not have much of a history of being gambling-friendly, so the popularity of the activity remains to be seen. The state does have geographical advantages though, being a centralized location to several major metropolitan areas. It’s also the 12th largest state in the US.
Virginia does have some restrictions as well, no collegiate team from Virginia may be the subject of any wager and live-betting on collegiate games is strictly prohibited.
West Virginia has slowly emerged as one of the leaders in legal and regulated online gambling. The state allows online casinos, online sports betting, online horse racing, daily fantasy sports and soon will be launching an online poker platform.
West Virginia legalized interactive wagering in March 2019 with the passing of House Bill 2934, also known as the West Virginia Lottery Interactive Wagering Act. The first online casino was launched in July 2020, with dozens due to follow. These casinos are regulated and governed by the West Virginia Lottery.
Sports betting was legalized in 2018, not long after the Supreme Court decision to legalize sports betting federally.
West Virginia is also less restrictive than other states when it comes to sports betting. While high school sports wagers are prohibited, e-sports and live wagering on collegiate games are completely legal. Including in-state events.
Gambling regulations in the United States are very complex and greatly vary depending on the jurisdiction in which you are currently residing or playing. It dates back to the 1680’s, as horse racing was a form of entertainment for the emerging upper class of the mid-Atlantic region. Around this time, a very primitive form of lotteries were also introduced in the 13 colonies and even helped fund their growth. Historians have found at least 392 different lotteries in newspaper advertisements throughout the Colonial Era.
After the Second and Third Great Awakening, anti-gambling religious activists moved to shut down gambling operations and many legal venues were closed as a result. Just like other prohibitions throughout United States history, this just moved gambling activities underground into the criminal underworld.
While a few horse racing tracks were able to avoid closure, gambling remained illegal in almost all jurisdictions until the 1930’s. To bring economic relief from the Great Depression, the state of Nevada passed Assembly Bill 98 into law, legalizing gambling in the state and giving birth to the world famous city of Las Vegas. The city rapidly grew in the 1950’s and quickly became the epicenter for gambling activities in the United States.
New Jersey followed suit in 1977, legalizing certain forms of gambling in Atlantic City. In 1979, the Seminole tribe opened its first reservation-based commercial casino. In the following years, many other states began slowly adopting their own lotteries and other types of parimutuel betting systems.
In 2018, a landmark decision by the United States Supreme Court overturned the Professional and Amateur Sports Protection Act of 1992. This effectively legalized sports betting on a federal level.
As of 2021, 48 states have some form of legalized gambling. The only states that do not are Hawaii and Utah. Most of the legal gambling activities are state-run lotteries or other forms of charitable events such as bingo. Only 22 states allow commercial casinos and 11 allow online gambling. All legal gambling options in these states are taxed and regulated by their respective jurisdictions.
The legal gambling age in the United States also varies greatly by state and by game or venue.
See the chart below for the age requirements for each jurisdiction.
*Native American Reservations are geographically present in this state, where all offered gambling activities have a minimum age of 18 regardless of state law.
** If a game is not listed, it is illegal or not offered in that state. Hawaii and Utah do not offer legal gambling of any type.
In 2018, a landmark decision by the United States Supreme Court overturned the Professional and Amateur Sports Protection Act of 1992. This effectively legalized sports betting on a federal level.
25 states currently offer, or will soon offer, legal sports betting within their jurisdiction in some capacity or another.
These states include:
The legality of poker in the United States is very confusing to say the least. Just like many other forms of gambling, it is entirely dependent on the jurisdiction that you’re currently in.
To understand the poker laws in the United States, you first must know the history of online poker. One of the most popular and well-known sites during the early to late 2000’s was FullTiltPoker.com. This site offered a user-friendly interface and hundreds of game types and table limits to US players.
On April 5, 2010, the Financial Times reported that a federal grand jury in Manhattan was investigating Full Tilt Poker and individuals associated with the company, including Howard Lederer and Chris Ferguson, for violations of gambling and money-laundering laws. Although neither the Manhattan United States Attorney nor officials with the United States Department of Justice would comment on the matter, it was reported that such an investigation "would fit the federal law enforcement strategy by trying to make an example out of prominent targets". The DOJ maintained that online poker violates the Interstate Wire Act of 1961, but later changed their opinion on that matter.
On April 15, 2011, the DOJ unsealed an indictment, dated March 10, 2011, against two of the owners (Ray Bitar and Nelson Burtnick) of Full Tilt Poker, along with the operators of 2 competitor poker sites, PokerStars and Absolute Poker. The defendants were charged with fraud, money laundering, and violation of United States federal gambling laws, and certain domain names for the sites were seized by the FBI.
On September 20, 2011, the DOJ accused Full Tilt Poker of defrauding poker players out of more than $300 million. The U.S. Attorney in the Southern District of New York filed a motion to amend an earlier civil complaint to allege that company directors Chris Ferguson, Howard Lederer, Rafe Furst, and Ray Bitar operated what the Department Of Justice claims was a Ponzi scheme that allowed the company to pay out $444 million to themselves and other owners, which included other famous poker players. A lawyer for Ferguson has denied the allegations, suggesting that the issues may have been the result of mismanagement rather than malice. Bitar surrendered to authorities on July 2, 2012, to deal with the civil and criminal case that is pending against him in New York .On April 15, 2013, Bitar reached a deal with prosecutors to plead guilty to criminal charges, and was sentenced to time served and ordered to surrender his assets, rumored to include various homes and $40 million in cash.
After these indictments, the game of poker went back offline and into the local criminal underworld where it first gained its popularity. Online poker then resurfaced a few years later.
In 2012, the US government dismissed all civil complaints against PokerStars and Full Tilt Poker after reaching a settlement with PokerStars which includes PokerStars purchasing Full Tilt. Under the terms of the settlement, PokerStars and Full Tilt Poker admitted no wrongdoing for their past activities. TheUnited States Government acknowledged both companies can apply for licenses to operate online gaming in the U.S. when a legal framework for such licenses is offered. The settlement terms also called for PokerStars to acquire certain assets of Full Tilt Poker from the Government.
As of February 2021, Pokerstars is one of the largest legal and regulated online poker platforms in the United States and operates in New Jersey and Pennsylvania.
The following states allow some form of legal poker:
State-regulated lotteries have been a part of American society for centuries. There are currently 46 jurisdictions that have lottery games available for players. While the odds of winning are not ideal, the “donation” usually will go to a charitable cause.
Lotteries are operated independently by each jurisdiction, and there is currently no national lottery organization. However, consortiums of state lotteries jointly organize games spanning larger geographical footprints, which in turn, carry larger jackpots. Mega Millions and Powerball, are both offered in nearly all areas that operate lotteries.
In most jurisdictions, you must be at least 18 years old to participate in these games. In some states, the games available have the odds of winning listed on their website or even on the printed ticket.
Similar to other games available to players in the United States, the regulations, legality and variants of Bingo are different in every jurisdiction. The game as we know it was created and standardized in the US in the early 1920’s and copyrighted in 1933. By the 1940’s it was being played widespread throughout the country.
Bingo is commonly run as a charity event by nonprofit organizations, activist groups and churches. It is also common in social settings. After changes to the federal Wire Act were made by the United States Department of Justice in 2011, Bingo is now legal under federal law. Check the above chart to see if it is available to you in your jurisdiction.
Online gambling regulation in the United States has become increasingly complex in the recent year as the COVID epidemic has surged across the country. Players have been forced to stay home, many of whom now seek alternatives to play their games of choice. Unfortunately for many US residents, this underworld of e-gambling is not a legal option as of 2021. While there are thousands of websites that claim they accept players located in the US, this is generally not true and could come with serious financial consequences when you register and begin to deposit.
The future does seem bright for gamblers throughout the United States, however. It is becoming more and more accepted socially, both online and in-person. While gambling will always have its detractors, states are scrambling to close deficits and create new revenue streams to combat the extensive costs of the epidemic.
If your state does not currently offer a wide selection of gambling opportunities, sit tight, as they may be available to you sooner than later.
Yes, gambling winnings are fully taxable and you must report any income on your tax return. Gambling income includes but isn't limited to winnings from lotteries, raffles, horse races, and casinos. It includes cash winnings and the fair market value of prizes, such as cars and trips.
A casino or “payer” is required to issue you a Form W-2G if you receive certain gambling winnings or have any gambling winnings subject to federal income tax withholding. You must report all gambling winnings as "Other Income" on Form 1040.
Gambling is the wagering of money or something of value on an event with an uncertain outcome, with the primary intent of winning money or material goods. Gambling requires three elements to be present. Consideration (an amount wagered), risk (chance), and a prize (winnings).
The outcome of the wager is often immediate, such as a single roll of dice, a spin of a roulette wheel, or a horse crossing the finish line, but longer time frames are also common, allowing wagers on the outcome of a future sports contest or even an entire sports season.
Hundreds of different games are played throughout various world cultures. In the United States, gambling has existed since the Colonial Era and continues to gain popularity today.
Inversely, yes, you may deduct gambling losses if you itemize your deductions on Schedule A (Form 1040) and have kept a record of your winnings and losses. The amount of losses you deduct can't be more than the amount of gambling income you reported on your return. Claim your gambling losses up to the amount of winnings, as "Other Itemized Deductions."
Units are commonly used in the sports betting world and represent an easy way to discuss a betting strategy.
Depending on your bankroll, 1 unit can be anywhere from $1 to $1 million. For most handicappers, 1 unit represents $100.
When a player likes a certain bet they will usually place “1 unit” on the outcome. If they are extremely confident in the outcome, they will usually say they placed “3 units” on the outcome, meaning they placed 3x their normal bet on their desired outcome.
Online gambling is technically “legal” in every state, however in most states, it is not controlled by any regulatory body. Thousands of off-shore casinos are more than willing to take your wagers, usually with cryptocurrency, however, you should remain extremely cautious if you plan on using these sites.
The following states have legal and regulated online gambling as of 2021:
Below is a list of the current legal gambling sites for US residents in each state. If a site is not listed below, we do not recommend joining.
The best online gambling sites are entirely up to you and your preferences. While some people are enticed by large deposit bonuses and comp points, others may prefer a wider selection of games.
Be careful with the “deposit bonuses” however, as they usually come with large wager requirements before they can ever be cashed out as winnings.
For example, here are the requirements for Caesers Online Casino for residents of New Jersey:
-In order to be eligible to withdraw the bonus funds and any winnings generated from wagers made with the bonus funds, players must wager the combined deposit and bonus amount (the “Wagering Requirement”) 5x on slot games, 10x on video poker games, and 25x for all other games.
-Players have 7 days to satisfy the Wagering Requirements from the day the bonus funds are awarded. Failing to do so will result in the expiration and forfeiture of any remaining bonus amount
-Making a withdrawal with any funds locked to a bonus or cancelling the bonus itself, prior to satisfying wagering requirements will result in the bonus funds and any bonus winnings being forfeited. However, any unused portion of the original deposit amount will be available.
These terms are generally very favorable to the player, but every site and state has different requirements. Be sure to read through the terms and conditions thoroughly before accepting a deposit bonus.