Gambling in the US is a tricky subject to navigate because each state has its laws around the topic. But in recent years many states have begun to change their legislation, opening the possibility of online gambling for millions of people.
For such a long time, the only way to gamble legally in the US was to place bets down at the racetrack or by visiting a brick-and-mortar casino. However, now citizens in several states such as Arkansas, Colorado, New Jersey, and New York can either place bets online for a few popular sports or play games such as Blackjack and Roulette at online casinos. Some states even allow both activities.
The reason that so many more states are changing their laws around online gambling is because of the number of success stories elsewhere in the US. And here are just a few of the cases that are encouraging more states to follow suit:
New Jersey setting the trend
New Jersey was the first state to legalize sports betting outside of Nevada, which of course is famous for being home to Las Vegas, possibly the most famous place in the world associated with gambling. However, New Jersey did have its own little historic area synonymous with the gambling world too in Atlantic City.
But with the city in disrepair, and tourism hitting an all-time low, the local Government needed to do something to change the fortunes of this historic and iconic place. To do that though, they would need money, and lots of it, in order to renovate Atlantic City and restore it to its former glories.
That meant legalizing not just sports betting, but online gambling in general. Leading the way for the rest of the US by being the first state to pass legislation that would mean licensed and regulated businesses could launch online operations in the state.
But why would this benefit them? Well, despite creating more jobs by introducing a new industry, which would obviously lower employment and increase income tax revenues, there were other benefits too.
In the US, the Government not only taxes businesses that make profits, but also people who win money from wagering on sports and placing bets in casinos. So, it was a win-win situation. Because no matter if the online house won, or a player managed to hit the jackpot, it meant a further increase in tax revenues to be put toward bringing Atlantic City back to life.
And since its legalization, the numbers of how much the Government has raked in from online gambling is staggering. As of the end of April 2022, New Jersey has collected, via the state and local jurisdictions, $222,683,962.
And whilst so many states have already opened things up for online gambling, there are still so many that are yet to legalize their operation. But it won’t be long before more states make similar changes, looking at the father of online gambling success, Connecticut launched legal online sports betting and casinos on Oct. 19, 2021, which reason why, it is expected that more online casinos are expected to launch in Connecticut later this year with the passing of House bill 6451.
New York breaking records
New York is one of the newer states to open their laws to include online gambling, although currently only for online sports betting and not online casinos. Although a Bill has been proposed for that as well and could be passed and put into practice before the year’s end.
It has been an interesting turn of events as well because many tried to include fantasy sports in online gambling. But a recent case at the New York Court of Appeals has actually been declared as a game of skill, not gambling. So, as it stands, only sports betting is the legal form of online gambling in the Empire State. Which makes this next part even more impressive.
Launching in January 2022, New York saw over $1.6 billion placed in that month alone. More in that one month than many states have made in the previous 12 months. And they continue to put out impressive numbers, with February also seeing just over $1.5 billion, and March seeing $1,644,789,692 wagered.
To put this into context, before the legalization of online gambling, December 2021 saw just $21 million placed in wagers. It also saw just $76,461 generated in tax revenues, whereas the lowest they have generated since legalization has been just over $41 million. That is one impressive increase.
Online gambling in Pennsylvania is costly, for some
Our final success story with regards to the legalization of online gambling comes from Pennsylvania, which has managed to collect more tax from operators than any other state. That is despite seeing a lower amount wagered than the likes of New Jersey, whose impressive tax figures we mentioned earlier.
How are they doing this though? Well, it all began when the state legalized the use of sportsbook apps in May 2019, which saw business increase drastically as a number of new sportsbooks came to try and take advantage of the new market. But in order to be granted a license, they had to agree to pay a $10 million fee and accept an effective tax rate of 36%.
Therefore, despite players wagering lesser amounts than elsewhere in the US, because of the exceptionally high tax rate compared to other states set by the Department of Revenue, they are raking in more revenue. In total, up until the end of April 2022, the state and local jurisdictions generated $240,853,837.
More success cases to come…
The reason so many states have held off until now to legalize online gambling is because they wanted to see issues other states faced so they could prevent them from happening in their states. These issues include how to tackle problem gamblers, how to effectively regulate the industry, and how to ensure the industry is a successful one.
But now they are seeing the rewards others are benefitting from, there is no doubt that we will soon see more success cases on the horizon. The only question is, who will be the next big success story?