Understanding the Legal Landscape of Online Casinos in the U.S.

The legal landscape of online gambling in the US can be hard to navigate. If you didn’t know better, it’s easy to assume that most states allow online gambling, given that online casinos, sweepstakes casinos, and online sportsbooks seem to be everywhere.

The reality, however, is much more complicated. The gambling landscape of today emerged from a complicated web of state and federal laws that allows restricted forms of gambling to operate in most of the US, even though only a few states explicitly allow online casinos to operate. Here’s how that works.

The legality of online casinos in the US

With how many famous casinos there are in the US – ranging across brick-and-mortar options, big online casinos, and even cruise ships like the Disney Treasure – it’s easy to forget just how few states have legalized gambling. And the online gambling landscape is even more restricted.

Currently, online casinos are only legal in the following 6 states:

• Connecticut.
• Delaware.
• Michigan.
• New Jersey.
• Pennsylvania.
• West Virginia.

New Jersey was the easiest state to legalize online casinos but only 5 others have followed suit since. This means that a huge percentage of the US population does not have access to homegrown online casinos that operate within US borders.

Online casino licensing and activity in each state is overseen by the relevant state organization such as the West Virginia Lottery Commission, or the New Jersey Division of Gaming Enforcement. This differs from other countries as there is generally one licensing organization responsible for the vetting of online casinos nationwide. 

Is the legal landscape likely to change?

Gambling in general in the US is highly regulated and the laws are far stricter than in many other countries. State governments have generally adopted a conservative stance on online gambling, although great strides have been made in the sports betting and daily fantasy sports industries.

Initially, online sportsbooks were legal in only a handful of states, but US customers can now access them in 37+ states. In time, there is a chance that this trend will happen for online casinos and the playing field will eventually be levelled.

The legality of sweepstakes casinos in the US

Although real money online casinos are restricted in the US, there is an alternative that has seen a surge in popularity in recent years – sweepstakes casinos. Most US states have not banned sweepstakes casinos. As a result, sweepstakes casinos often accept players from over 40 US states, with common exceptions being:

• Washington.
• Idaho.
• Nevada.
• Montana.

These are states that have either banned sweepstakes casinos – which Washington has done – or have placed restrictions that make these casinos harder to operate. Most new sweepstakes casinos are available in 44+ states and the best sites are accessible in 46 – just not the above 4 states, as this list shows: https://deadspin.com/sweepstakes-casinos/new/.

What are sweepstakes casinos?A sweepstakes casino is a website where you can play casino-style games and potentially win prizes. The main difference compared to traditional options is that sweepstakes casinos are free to play and customers use virtual currencies instead of USD to play games with. These virtual currencies are usually Gold Coins and Sweeps Coins. 

Gold Coins are only used to play games for free and have no redeemable value, whereas Sweeps Coins can be redeemed for cash prizes provided customers meet the requirements such as the minimum redemption amount.

The coins are given freely in a variety of ways such as a welcome bonus, daily login reward, referral schemes, and by playing the casino-style games. There are also usually optional Gold Coin packages customers can purchase using methods like Visa or MasterCard and these usually include free Sweeps Coins.

Sweepstakes casinos regulations

Sweepstakes casinos must also comply with sweepstake regulations to be legal in the US. To be compliant, sweepstakes casinos must do the following:

• Not allow real money deposits: Customers cannot make deposits at sweepstakes casinos – they can only purchase optional Gold Coin packages.
• The games are always free to play: The casino-style games must always be available to play with no purchase necessary. This is achieved via the distribution of free Gold Coins and Sweeps Coins.
• No real money games: Sweepstakes casinos cannot offer real money games – the games must only be playable using the GC and SC virtual currencies.

Online casinos remain highly restricted in the US

For now, access to real money online casinos is incredibly limited in the US as they can only legally operate in Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, and West Virginia. 

US residents do have a valid alternative in the form of sweepstakes casinos, which have far greater availability and are typically available in 40+ US states (this varies from site to site). Sweepstakes casinos offer free play casino-style gaming but also give the chance to make cash prize redemptions with the premium Sweeps Coin currency.

Similar Stories