Can US online casinos win regulatory support like sports betting?
The adoption of online casino gaming in the United States is expected to remain slower and more politically complex than the rapid adoption of sports betting, despite growing evidence that online casinos deliver higher and more stable tax revenues.
That is the assessment of Aviram Alroy, the newly appointed Head of iGaming at SCCG Management, a global advisory firm specialising in gaming, sports betting, and online gambling. Speaking exclusively to SiGMA News, Alroy said the contrast between the two verticals reflects political caution rather than economic logic.
Alroy said regulatory support for online casinos is likely to grow, but not through the same voter-driven momentum that fuelled sports betting.“We’ll probably never see an iGaming regulation rollout that mirrors sports betting,” he said.
Alroy further added, “Even though most state governments understand they’ll generate more tax revenue from online casinos compared to sports betting, they believe it is a much harder sell to their constituents, which is a big reason we’re seeing slower adoption.”
Public opinion remains a major constraint. A recent survey conducted by Lake Research in the state of Maine showed strong opposition to online casino legalisation, with 64 percent of voters against the idea. Lawmakers have increasingly cited such figures as justification for delaying or vetoing legislation, even in states where regulated casinos already operate.
The wide regulatory gap
And so, the caution is evident in the regulatory framework landscape. As of early 2026, only seven US states offer some form of legal online casino gaming, compared with more than 30 states that have approved sports betting. Alroy believes the imbalance is unlikely to narrow anytime soon.
“Until all alignment issues get resolved at the state level, the legal infrastructure just sits on the shelf,”
– Aviram Alroy, Head of iGaming, SCCG Management
Another factor shaping state hesitation is the rapid expansion of alternative online platforms operating outside traditional gaming frameworks. Sweepstakes-style platforms and prediction markets have grown sharply, particularly around major sporting events, while remaining largely untaxed at the state level.
Industry analysts estimate that sweepstakes gaming alone generates several billion dollars annually in the US. Alroy said governments are becoming increasingly aware that they are receiving no tax revenue from these platforms, even as consumer participation continues to rise. This is probably the reason why New York banned sweepstakes casinos.
“State governments are realising now they’re generating zero tax revenue from alternative gaming platforms like sweepstakes and prediction markets that are already operating in their jurisdictions,” he said. “They’re also realising online gaming is happening whether they regulate it or not.”
Opposition from tribal and land-based casino operators has also played a role in slowing online casino adoption. Concerns have long centred on the fear that online casinos would cannibalise physical venues. However, Alroy argued that years of operational data now challenge that assumption.
In states such as New Jersey and Pennsylvania, operators with integrated online and land-based offerings have reported higher customer lifetime value. Online players are more likely to enrol in loyalty programmes, visit physical casinos, and spend across hotels, dining, and entertainment.
“When databases are managed strategically, online play actually increases visitation to brick-and-mortar properties,” Alroy said.
Signs of momentum
According to Alroy, the central obstacle is no longer legislative design but political alignment. “Most states could write an iGaming bill tomorrow,” he said. “The real hurdle is getting operators, tribes, legislators, and governors aligned on risk and reward.”
Even so, signs of momentum are beginning to emerge in regional clusters. New Jersey, Pennsylvania, Connecticut, and Rhode Island are already live, with Maine tribes recently approving online gaming. Michigan has positioned itself as a Midwest outlier, where iGaming now accounts for more than two-thirds of total digital gaming revenue. This is widely attributed to strong regulatory alignment between tribal and commercial operators, alongside early political buy-in.
Indiana’s renewed push to revisit online casinos and digital lotteries is now being closely watched, with industry observers suggesting it could encourage other Midwestern states to follow.
Prediction markets eating into revenues?
Prediction markets are adding a new layer of complexity. Major operators such as FanDuel and DraftKings are running federally regulated prediction platforms alongside their state-licenced sportsbook operations.
Alroy warned that if prediction markets expand into casino-style platforms, states could face significant revenue losses. Analysts estimate that even a partial shift of online casino-style play to federally regulated platforms could cost individual states hundreds of millions of dollars a year in lost tax income.
“The existence of a federal framework further complicates state decision-making, particularly as high taxes, market access costs, and fragmented regulation continue to shape the economics of state-regulated gaming. “A federal framework can change the economics completely,” Alroy said. “It lowers barriers to entry and allows smaller players to find profitable niches.”
Despite those shifts, Alroy believes state-regulated iGaming will ultimately expand, albeit gradually. “The data is clear,” he said. “The question is how long it takes for politics to catch up with reality.”
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