Despite the rapid expansion of sports betting, supporters of legalizing internet gaming have had little success opening new states as concerns over problem gambling and the cannibalization of land-based casinos have deterred all but a few legislative efforts.
Proposed legislation to authorize iGaming failed this year in several states, including Maryland, New York and Illinois.
But a new year brings with it new legislative sessions and further chances for supporters to make their case.
“There’s a lot of hype,” said Martin Lycka, senior vice president for American regulatory affairs and responsible gaming at Entain. “The hope certainly is that at least one [state], if not a couple, get it done. But once again it’s shaping up to be an uphill battle.”
One reason behind the ongoing efforts to legalize iGaming is that it is producing impressive tax revenue for at least seven of the eight states where legal.
Currently, Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, Rhode Island and West Virginia all allow full online gaming, while Nevada regulates online poker only.
New Jersey’s online gaming market, which launched in 2013, reached a new milestone last month, with monthly iGaming revenue exceeding land-based revenue for the first time since the coronavirus pandemic.
New Jersey, Michigan and Pennsylvania are all set to report more than $2bn in total revenue from iGaming this calendar year, and nearly $2bn combined in resulting tax revenues.
New York, Illinois and Ohio are among the states that Lycka and Bill Pascrell III, a lobbyist with Princeton Public Affairs Group, believe will debate iGaming legislation next year.
Lycka said with the Empire State trying to dig itself out of a budget hole, legalizing iGaming would be a logical step to take.
New York currently faces projected budget gaps of $4.3bn in fiscal year 2025, followed by gaps of $9.5bn in fiscal year 2026 and $7.7bn in fiscal year 2027, according to the nonpartisan Citizens Budget Commission (CBC).
At the same time, Lycka said, the state and New York City continue grappling with the slow rollout of three downstate casinos.
The various major casino operators seeking one of three available downstate casino license will be required to submit applications in Spring 2025, with a licensing decision made in the first quarter of 2026, if not then by the end of 2025.
A bill to speed up the bidding process for the new downstate casinos was vetoed on Friday (November 22) by Democratic Governor Kathy Hochul, with the issue set to stay front and center in terms of gaming matters during the course of 2025.
“That’s definitely one of Hochul’s priorities,” Lycka said. “That’s top of the list, which then begs the question of whether there will be the political will and some space on the legislative agenda to get iGaming done.
“So perhaps it’s not a 2025 thing; it might be 2026.”
Pascrell said he recently spoke with New York State Senator Joe Addabbo, a Democrat who chairs the Senate's gaming and wagering committee.
He said Addabbo plans on approaching iGaming differently next session than he did with bill S 8185A this year.
That measure would have authorized both iGaming and iLottery but never received a committee vote. Pascrell said Addabbo plans to introduce separate bills for iGaming, iLottery and fixed-odds horseracing in January.
“I believe the New York budget is continuing to approach a need where this could become possible because of a large deficit,” Pascrell said. “They’re looking for new ways without raising taxes on other things to create new revenue. Online gaming would certainly do that.”
Pascrell put the odds at 60 percent that the New York legislature would pass an online gaming bill in 2025.
He said he was also confident that there was enough support from lawmakers in Illinois for getting an iGaming bill onto Democratic Governor J.B. Pritzker’s desk early next year in time to meet a requirement before it goes on the ballot.
"If that happens, I believe it'll pass if handled properly and the campaign is done right," Pascrell said. "Then we could see online gaming in Illinois perhaps in 2026."
As for the prospects for iGaming legalization in Ohio, Lycka was skeptical that lawmakers could pass a bill next year, noting that Republican Senator Niraj Antani who introduced Senate Bill 312 in 2024 had chosen not to run for re-election and Republican Governor Mike DeWine has made it clear he does not support legalizing online casino games.
“If there is no support, then I suppose, pragmatically speaking, those folks out in Ohio might not waste their precious legislative time with a bill that may stand no chance at all,” Lycka said.
“It’s never straightforward, but it’s still to quite some extent beyond me that there are only eight states to have regulated online casinos,” he added.
Pascrell put the burden to get iGaming legalized in more states on the gaming industry and not on politicians.
"Politicians are drinking out of a firehose. They're dealing with their electoral careers in addition to public policy."
Both Pascrell and Lycka participated in a webinar organized by Gaming Americas last week, along with Jeremy Kleiman, a gaming attorney with Saiber.