Analytics October 9th, 2026

Online Gambling in the US: The Complete iGaming Guide for Operators, Suppliers and Affiliates

There is no one market for online gambling in the US. The country is unique in that markets are fragmented and laws and licensing use very different systems in each state. Most of them have legalized some form of sports betting, while only 7 are legal online casino states–tethered to partnerships requiring revenue sharing with physical casinos. Taxes, regulation, and revenue sharing create a heavy obligation, with requirements like geolocation gating, licenses required for B2B service providers and iGaming employees, as well as liability for partners’ legal violations.

What Counts as Online Gambling in the US: iGaming, Sports Betting, Poker and Adjacent Verticals

Seen as online gambling is any activity where:

• Anything valuable is staked
• An element of chance helps decide the winner
• Winning means receiving a valuable prize

Online casino (iGaming): slots, tables, and live dealer as a regulated product

This includes slots, blackjack, roulette, baccarat, craps, video poker, and live dealer games, if authorized in the territory. An iGaming platform’s average hold is 12-20%.

Online sports betting: a different hold, a different risk profile

The typical hold is 3-5% in USA for wagering on sports, or about double that for in-play bets. 

Online poker and interstate shared liquidity

Unlike casino games where a player bets against the house, poker platforms have a lack of liquidity. There need to be enough players to provide it. That’s why platforms sign multi-state Internet gaming agreements, so that participating jurisdictions can share online poker liquidity.

Daily fantasy sports, social and sweepstakes casino

It’s been legal exceptions that have have helped the biggest sportsbooks in USA gro. Fantasy sports were allowed long before PASPA was repealed, which is how DraftKings and FanDuel made a name for themselves. Similarly, social gaming platforms are legal by not offering any real winnable money, and sweepstakes just use coins for fun and promotional “sweep coins”.

Prediction markets and CFTC event contracts as a parallel channel

Giants like Kalshi and PolyMarket have grown by operating like financial futures and the legal special treatment that includes by the federal government, although some states are trying to fight it. These are based on event contracts, with people betting on a prediction in any industry. The total handle is already bigger in this industry than sports betting, but the hold is less.

Why the vertical you pick decides your licensing path

Due to the serious differences in legality, it’s worth considering what’s permitted when choosing one’s offerings and what the revenue might be. Opportunities are very different for a bookmaker, Internet cardroom, poker room, DFS product, or sweepstakes operation.

US Online Gambling Market Size in 2026 and Where the Revenue Concentrates

The USA has the largest Internet gambling market on Earth, expected to hit $29.7-$43.5 billion for the year 2026.

iCasino gross gaming revenue by state and the NJ-PA-MI revenue triad

Interestingly, only a minority of the US Internet gambling industry comes from casino gaming,  just $10.74 billion. The US iGaming market itself gets most of its income from 3 states. Including their 2025 interactive gaming revenue, they are: 

• New Jersey: $2.91 billion
• Pennsylvania: $3.46 billion
• Michigan: $3.10 billion

West Virginia only allows racetracks to offer three interactive gaming slots with little money to be made. Delaware, Rhode Island, and Connecticut are almost nearly impossible to get access to since the territories only use one service provider.

Sports betting handle versus gross gaming revenue: two different scoreboards

In 2025, US online sports betting reached $16.96 billion.

Market share at operator level and what it says about entry room

Laws protect established, land-based casinos, and governments say they want to avoid cannibalization. So new entrants have to use realistic acquisition models, not just rely on market access. There is plenty of room for competition in the top 3 live iGaming states.

The top company revenues in online gambling in the US include:

• Pennsylvania: Hollywood ($1.06B), Valley Forge ($778M), and Rivers ($462M)
• Michigan: FanDuel ($817M), BetMGM ($782M), and DraftKings ($462M)
• New Jersey: FanDuel ($1.13B) and DraftKings ($895M)

Why market-size estimates disagree: scope, period and paid-report methodology

The US online gambling market size may seem contradictory due to financials being counted for different periods using different measurement systems.

• Scope: a report may include the online cardrooms and slots only. Sports wagering may be reported separately.
• Time period: one source uses the calendar year 2025 while another tracks a specific 12-month period.
• Paid market reports: often use company data instead of citing regulatory data

Does online casino cannibalize land-based revenue or grow the total market?

Local interests have slowed cybergambling growth by a lot. Licensing for interactive gaming businesses has been allowed to only come from partnerships with land-based establishments, often requiring sharing that income. However, more people are spending under liberalization than before. 

Legal Online Casino States vs Sports Betting States: The 2026 Map

As of 2026, 39 US states and Washington DC have legal sports betting, 8 have both sports betting and interactive gaming, while the rest ban both.

The live real-money online casino states and their launch dates

The current US jurisdictions where money is being wagered on gaming and when it started are:

• Delaware: October 31, 2013
• New Jersey: November 26, 2013
• Pennsylvania: July 15, 2019
• West Virginia: July 15, 2020
• Michigan: January 22, 2021
• Connecticut: October 19, 2021
• Rhode Island: March 1, 2024

Why sources say six, seven, or eight: Maine, Nevada and the poker-only exception

Before Rhode Island went live in 2024, there had only been six online casino legal states total. Since then, it became seven live markets. However, even before that, Nevada had legalized poker for Internet gaming (exclusively that vertical) way back in 2013. Maine has just legalized interactive gaming in 2026, but it hasn’t launched it yet.

Online sports betting jurisdictions and where the two maps overlap

As of September 2026, 32 states plus Washington, D.C. offer interactive sports betting, while 7 others have permitted sports betting in some form. The two industries overlap in the 7 legal online casino states.

The holdout states: California, Texas, Georgia

Several large US states are still grey and unregulated. The biggest are California, Texas, and Georgia.

Which states are most likely to open online casino next: NY, IL, MD, VA

Some jurisdictions are openly considering legalizing interactive gaming or have already introduced bills to legalize it:

• New York: appears likely to pass Senate Bill S2614 very soon
• Illinois: House Bill 4797 is being worked on
• Maryland: Senate Bill would authorize cybergambling and Internet bingo but has not been passed
• Virginia: Introduced Senate Bill 118, but it failed

The Federal Layer: Wire Act, UIGEA, the PASPA Repeal and IGRA

State governments and tribes still keep very different laws, but federal law helps to enforce those territorial laws.

The Wire Act of 1961 and the 2011 DOJ opinion

Wire communication can’t be used to transmit bets or betting information across territorial lines. Since it was passed before the Internet, a 2011 Department of Justice formal opinion affected how it affects digital gambling: that it is relevant strictly for sports betting, not cybergambling.

UIGEA 2006 and payment-side blocking obligations

The Unlawful Internet Gambling Enforcement Act punishes financial systems that knowingly fund illegal gaming. It is their legal obligation to detect, intercept, and block transaction codes tied to restricted cybergambling.

Murphy v. NCAA 2018 and what the PASPA repeal actually changed

In 1992, the PASPA Act was passed to ban sports betting in USA except in Nevada. This Supreme Court ruling ended that era. This then gave the states the right to decide whether to keep it banned or liberalize.

IGRA, tribal compacts and the parallel tribal track

The Indian Gaming Regulatory Act of 1988 created the federal system on how Indian lands were to be treated. A new, independent tribal track would operate separately from standard US  licensing systems, so tribes were permitted to create massive gaming businesses.

What federal law does not give you: there is no national license

Though federal laws are passed to strengthen state laws, they do not establish a federal regulatory body themselves. 

State Regulators and Operator Licensing: Who Approves What

Once a state permits cybergambling, the next question is which organization will have the authority to grant licenses.

Internet gaming operator license: scope, application fees and renewal terms

Most competitive US iGaming jurisdictions use “skin” systems under which physical casinos operate and give licenses to interactive gaming companies for specific verticals. Fees are vastly different by jurisdiction.

• Pennsylvania: $10 million during the first all-inclusive window, or $4 million per vertical if bought afterwards. The yearly renewal fee is $100K for the Internet partner buying the skin.
• Michigan: $100K application fee with a $50K per year renewal fee
• New Jersey: $400K+ initial fee plus a $250K advance deposit. The yearly renewal payment is $250,00 pear year plus an extra $250K deposit for investigation and assessments.
• West Virginia: $100K fee per skin and $100K yearly renewal

Suitability review: corporate structure, beneficial owners, and financing disclosure

Regulators require a massive degree of transparency among all corporate members. Every person or investor with a major share (usually 5-10%) has to have a personal background check done. The exact origin of all the capital used must be documented too.

Key-person and occupational licensing for executives and staff

Executives, board members, and decision makers have to get key-person licenses too, requiring big financial audits. Even employees with direct access to other important operations have an occupational license process they must complete.

Regulator reference: NJ DGE, PA PGCB, MI MGCB, WV, CT, DE, RI

Individual US state gaming regulators are:

• New Jersey Division of Gaming Enforcement
• Pennsylvania Gaming Control Board
• Michigan Gaming Control Board
• West Virginia Lottery Commission
• Connecticut Department of Consumer Protection
• Delaware Lottery
• Rhode Island Division of Lotteries

Market Access: Land-Based Partners, Skins and What a Deal Actually Costs

For many US businesses, the first big challenge is acquiring the right to enter a US online gambling market at all.

How the skin model works and why almost nobody licenses directly

Master licenses are only given to physical establishments, and digital platforms have to sign an iGaming market access agreement to hold the “skin,” authorizing them to operate a certain vertical. 

Skin caps, exclusivity, and how many brands each state allows

A master license only allows organizations to give out so many cybergambling “skins”. This controls competitive saturation and makes regulation simpler. 

Each can give out:

• New Jersey: maximum of 5 interactive gaming skins and 3 sports betting skins. 
• Michigan: one cybergambling skin and one sportsbook skin. 
• Pennsylvania: slot licensees can give out one skin for slots, one for table games, and one for peer-to-peer poker
• West Virginia: up to three skins

Typical commercial terms: upfront fee, revenue share floor, contract length

In mature territories like Pennsylvania or Michigan, access fees usually range from $1M to $5M just to sign the contract to secure the territory. Physical grantors demand a percentage of net gaming revenue too, usually 5-15%. If they fail to perform, there’s still at least a minimum amount they’ll have to pay. Contracts usually run 5-10 years.

Tribal market access, compacts and the Maine model

Other than commercial state opportunities, Native American tribes also use the IGRA and tribal compacts to get exclusive market access. Maine’s internet gaming law skipped commercial establishments and gave a strict monopoly to the four Wabanaki Nations.

Buy access, build a partnership or wait for direct licensing?

Internet platforms targeting USA have a big decision. Buying US online gambling market access is the fastest, most predictable entry method, but that means having to hand over massive upfront capital. If a platform builds a tribal partnership, they can get an exclusive, low-tax digital monopoly, but that will require commitment to deep, long-term relationship building. Better conditions may appear in the future, or waiting around could never create a better opportunity and just waste time.

State Tax Rates and the Margin They Leave an Operator

The iGaming tax rate state by state can hugely change a business’s profit margins. The GGR rate isn’t the whole story, but it’s the starting point for evaluating a market.

Tax Matrix by State and Vertical

State	iGaming Slots Tax	iGaming Table Games Tax	Internet Sports Betting Tax
Pennsylvania	54%	16%	36%
Michigan	20% to 28%	20% to 28%	8.4%
New Jersey	15%	15%	14.25%
West Virginia	15%	15%	10%
Connecticut	18% / 20%	18% / 20%	13.75%
Delaware	57%	35%	50%
Rhode Island	50%	18%	51%

Promotional deduction rules and how they move effective tax

Some states allow promo deductions: companies get to subtract the value of free bets, deposit matches, and bonus credits from their GGR. These hugely lower the taxes they owe. But these are fading. More governments are starting to slowly cut these write-offs or completely deny them.

Headline rate versus effective rate after fees and rev share

The posted tax rate does not show what the company’s actual tax rate will be. The effective rate includes all mandatory financial leaks before a single dollar reaches net profit. In tethered jurisdictions, 5-15% of net gaming revenue has to be paid to a physical casino partner.

Modeling a 54% online slots state against a 15% state on the same GGR

Still, a high headline tax rate can completely ruin unit economics. A business making $100M in GGR in Pennsylvania with a 54% tax rate for interactive slots could barely stay alive. Operating in a jurisdiction like New Jersey or West Virginia, they could enjoy just a 15% headline tax.

The Supplier Path: Vendor Licenses, GLI Certification and Transactional Waivers

US suppliers have to satisfy licensing and certification requirements too.

Platform provider, game studio, and ancillary vendor: three different applications

If your software touches a player account, handles a bet, or affects game integrity, you need a license. You may need:

• Platform provider license: if providing core operational infrastructure
• Game studio/content provider license: the software tier
• Ancillary vendor license: companies that help strengthen the legal functioning of an cybergambling ecosystem

Independent testing labs and GLI standards for RNG and live content

These audit and certify games to ensure absolute fairness and security. Standards like GLI-10 help guarantee RNGs have true randomness. They also vet live dealer studios.

Transactional waivers and provisional approval: going live before final licensing

These procedures allow B2B suppliers and platforms to launch their platforms and make money while their permanent licenses are being processed over a long time period.

Per-state recertification, change control and release management

Every software update requires repeat certification and formal change control logs in each jurisdiction. Single software patches have to be issued through separate, highly regulated release pipelines for every jurisdiction.

Game library depth as a competitive lever in NJ, MI, and PA

In New Jersey, Michigan, and Pennsylvania, game library depth serves as an important asset for keeping more players. The biggest platforms offer over 1,500 slot and table games to capture every niche.

Unit Economics of One State Launch: From GGR to Net Contribution

Companies need to model the full interaction–from player wagering to the final contribution after subtracting all the costs.

Gross gaming revenue, hold, and game-mix assumptions

GGR modeling requires a precise projection of a business’s game collection, since different verticals have very different hold percentages.

Applying the state tax rate and promo deduction to the model

When looking at every tax rate, future platforms must also think about promo deduction rules since this significantly reduces debt to the government. Some, like New York, offer zero write-offs, while others offer some.

Market access fee and land-based partner share

In tethered jurisdictions, platforms must pay for a required market access layer, including huge upfront licensing fees and continuously split revenue in a land-based partnership.

Platform and content revenue share

These both lower a business’s net earnings, since third-party providers take a direct percentage of GGR. A PAM system typically takes 5-8% while premium game studios and live dealer providers take 10-15%.

Payment cost, declined deposits, and chargebacks

Every player deposit gets charged 1.5-3.5% by processors too. Since the legacy banking system has restrictions, a large number of deposits get declined, 10-15% for standard credit cards. Players abusing chargebacks are another problem eating around 10% of revenue.

CAC, bonus cost and realistic payback windows

Customer acquisition cost is often $300-$500 per player. LTV must consider the bonus costs that were required to acquire players. Payback windows average 12-24 months.

Payments for US iGaming: MCC 7995, Declines and Withdrawal Design

Cybergambling payments involve more than just choosing a processor.

MCC 7995 and why issuer-side declines cost you deposits

Merchant Category Code 7995 is the universal financial identifier card networks use to flag internet gambling transactions, creating automatic fraud blocks in major US banks. Since many of them hate risk, they often ban gambling purchases completely, and players get 10-20% of legitimate card transactions declined.

A card-first, bank-transfer-second deposit stack

An optimized deposit stack prioritizes high-conversion cards at the top of the user interface to capture immediate player intent. However, other options must be added to ensure players can be able to fund their accounts.

State-level restrictions on credit card deposits

Companies cannot just use one payment system across the US, because more and more governments are restricting or completely banning card use for responsible gambling.

Payouts: closing the deposit-to-withdrawal loop without AML exposure

Businesses have to send withdrawal funds directly back to the original funding source.

Acquirer selection, chargeback thresholds, and sandbox testing before launch

High payment health requires partnering with specialized merchant acquirers with high baseline approval rates in interactive gaming to keep chargebacks below 1%. Sandbox testing before launch helps guarantee perfect transaction routing and data encryption.

Geolocation, KYC and Continuous Compliance Across State Lines

Operating across multiple jurisdictions means continuously conducting geolocation compliance in iGaming.

Player location checks: frequency, failure handling and audit trail

Technology from providers like GeoComply is used to confirm users are truly physically located within state lines, during: 

• Signup
• Login
• Before each wager is paid
• Random times

KYC, AML, and the 21-and-over rule as a single customer base

Companies create unified databases combining KYC, AML, and age-verification protocols into one automated step.

Reusable identity instead of a new KYC vendor in every state

The industry is now using decentralized identity models so the same players don’t have to be processed all over again.

Player source of funds and responsible gambling data requirements

For consumer protection, compliance teams must monitor player transaction patterns for signs of problematic behavior and financial trouble.

Audit cadence and continuous compliance under NJ DGE

The New Jersey Division of Gaming Enforcement has huge compliance demands, including strict operational and financial audits every year.

Wire Act limits on cross-state data transfer and shared liquidity

Sports betting data and user wager information can’t be sent across jurisdiction borders. So servers have to be run in separate state centers.

Advertising Rules, Responsible Gambling and Affiliate Licensing by State

Advertising is fiercely regulated, as platforms have to control even what their affiliates and media partners do when promoting them.

States that license or register affiliates: NJ, PA, CO, IN, WV, MI, TN, VA

In some jurisdictions where affiliates get paid based on cost per acquisition alone, simplified registration systems are in place. Several are:

• Indiana
• Colorado
• Tennessee
• Virginia

In premier interactive gaming markets, revenue-share marketing partners have to complete full supplemental supplier licensing. These include:

• Michigan
• New Jersey
• Pennsylvania
• West Virginia

Prohibited claims: risk-free, free bet, and guaranteed-win language

There is zero tolerance against any advertising that suggests gambling carries no financial consequences or guaranteed wins. “Risk-free” and “free bet” are strictly banned if the player has to deposit money to use it.

Disclaimer, age gating and helpline requirements per state

Every piece of marketing must use responsible gambling messages and strict age-restriction gates. Texts must have local addiction helpline numbers displayed too.

Self-exclusion registries and suppression list integration

Operators must use automated, real-time technology to protect vulnerable or restricted individuals. Marketing teams must continuously delete player data from databases and be careful not to contact them with any materials.

Operator liability when a partner breaks state advertising rules

Gaming boards hold B2C platforms strictly liable for iGaming affiliate compliance and the actions of media partners. The five- or six-figure fines are not to be taken lightly.

Media buying limits: channels, campus rules and creative approval

No all types of media purchases are allowed. No advertising can be done on college campuses or within entertainment focused on children. Marketing materials must be strictly pre-approved.

Affiliate and Partner Program Economics Under US Tax Tiers

US affiliate economics is quite different from other markets due to high gambling taxes and revenue sharing with multiple partners and services.

Why CPA dominates in the US and revenue share is rare

Regulatory costs and taxes are so high that revenue sharing doesn’t make financial sense.

How a 51% sports betting tax rate reshapes the commission an operator can pay

In jurisdictions with super high rates like New York, which charges 51% on GGR, there is little funding left over for marketing partners.

Geo-gated tracking: blocking conversions from unlicensed states

Affiliates have to use advanced geo-gated tracking infrastructure to make sure they only get paid off traffic from within the jurisdiction’s borders.

Structuring multi-state partner agreements and per-state commission rules

Since all states are different jurisdictions, multi-state partner agreements have to be made with  commission terms listed for each one.

Who is liable when geo-targeting leaks: affiliate or operator

If an affiliate’s marketing efforts reach unauthorized territories or restricted audiences, the B2C business will be held legally and financially liable.

The Grey Zone: Offshore Brands, Sweepstakes Casinos and the Enforcement Wave

Operators entering the US should also know of the offshore and sweepstakes models.

How the sweepstakes model works: dual currency, AMOE and prize redemption

Sweepstakes offerings legally operate by using a two-currency system–“Gold Coins” for entertainment and promotional sweep coins that use an alternative method for entering. 

States that have banned or restricted sweepstakes play

More governments are banning sweepstakes play to protect their local commercial gaming monopolies. Some include:

• Washington
• Idaho
• Michigan
• Nevada
• Montana
• Delaware
• Connecticut

The 2025–2026 attorney general and cease-and-desist wave

Attorneys general and gaming boards have become more aggressive, sending cease-and-desist orders to grey market operations, especially in Michigan, Colorado, and Ohio.

What offshore traffic costs you when you apply for a state license

Knowingly accepting offshore or gray market traffic from US players means possibly losing a license.

Launch Timeline: From Application to First Accepted Wager

A US cybergambling launch requires several regulatory and technical stages, and a delay at any one of them can push back launch.

Pre-filing: corporate structure, disclosure and market access negotiation

This phase requires operators to clearly establish their corporate members, specify all beneficial owners, and complete a commercial skin agreement with land-based partners.

Application review and background investigation

Once submitted, a thorough suitability review is done of the organization and its executives.

Platform integration, lab testing and certification

After getting a temporary license, companies start engineering. Their account management system and game library must complete independent lab testing.

Controlled demonstration and regulator-supervised soft launch

A required soft launch window then begins to test under limited activity, how the live ecosystem holds up under real-world conditions. 

The five blockers that most often stall a US launch

Late launches in online gambling in the US are most often caused by:

• Executive documentation delays
• Complex corporate tracking
• Interstate geolocation technology issues
• Payment engine declines
• Game certification gaps

FAQ

Is iGaming the same as online sports betting in the US?

No, they are taxed very differently and are governed by completely separate laws. Only 8 US states have legalized interactive gaming, while 39 states plus Washington DC have legalized some form of sports betting.

Which states allow real-money online casino in 2026?

New Jersey, Pennsylvania, Michigan, West Virginia, Connecticut, Delaware, and Rhode Island. Nevada permits Internet poker only, and Maine has legalized it but not launched it yet.

Is there a federal online gambling license, or do I need one per state?

There is no federal license for online gambling in the US. US Internet gambling is completely decentralized, and the rules and licenses work completely differently in each jurisdiction.

Do I have to partner with a land-based casino, and how many skins does each state allow?

Yes, in almost all interactive gaming jurisdictions, commercial tethering is legally required. Every government allows a different number of skins to be given out by a master license holder. For example, in New Jersey, it’s up to 5.

How much does a US online casino license cost in application and annual fees?

States’ online casino license cost is very different. It’s usually in the low hundreds of thousands of dollars. In Pennsylvania, though, you start off having to pay $10M for an all-inclusive license or $4M per skin. 

Which states require affiliates to hold their own license?

New Jersey, Pennsylvania, Colorado, Indiana, West Virginia, Michigan, Tennessee, and Virginia.

Who is liable if traffic leaks into a state where the brand has no license?

The licensed customer-facing platform is absolutely liable and is subject to fines.

What is MCC 7995 and why do card deposits fail with sufficient funds?

This is the universal merchant category code for internet gambling. Banking institutions are required to automatically decline certain transactions under this law under anti-gambling policies.

Is the sweepstakes model a legal way into non-regulated states?

Yes, historically. However, more and more governments are making cease-and-desist orders to ban or restrict the sweepstakes model.

How long does it take to go from application to first accepted wager?

The average is about 10-14 months, depending on executive reviews, independent software certification, and finishing a live soft launch.

Final Thoughts

The US online gambling market may be fragmented, but it’s still the largest such market in the world. For established, well-funded businesses managing the requirements, it’s well worth entering the markets where they excel. Following requirements closely makes business profitable and is a competitive advantage. With the industries growing every year, there are plenty of opportunities for new platforms.