Over the past six months, the U.S. gambling landscape has experienced significant developments in both legal and unregulated (offshore) sectors. These changes reflect evolving consumer behaviors, regulatory actions, and market dynamics.
Expansion of Legal Online Gambling
The legal online gambling market in the United States continues to grow robustly. In 2024, the market size is estimated at USD 5.12 billion, with projections reaching USD 10.98 billion by 2029, indicating a compound annual growth rate (CAGR) of 16.52% during the forecast period.
This growth is driven by increased internet penetration, widespread smartphone usage, and the legalization of online gambling in several states.
The 2024 Super Bowl set new records: an unprecedented 123.7 million people tuned in to watch the spectactle across all platforms, breaking the record previously held by the 2015 Super Bowl XLIX (Seattle Seahawks vs. New England Patriots) which had 114.4 million viewers.
The latest state to embrace legal sports betting is Missouri, which has officially joined the list of states where sports betting is legal, as voters approved Amendment 2, allowing both mobile and retail sports betting options.
Surge in Sports Betting
Sports betting has emerged as a significant contributor to the gambling industry’s expansion. The National Football League (NFL) is expected to see a record $35 billion in legal wagers this season, representing a 30% increase from the previous year.
This surge is attributed to the growing legalization of sports betting across the United States, now live in 39 states and Washington D.C., with new legalizations in Maine, North Carolina, and Vermont.
Challenges with Offshore Gambling
Despite the growth of regulated markets, unregulated offshore gambling remains a concern. The U.S. Department of Justice (DOJ) has reiterated its commitment to combating illegal offshore gambling activities. In response to appeals from state regulators, the DOJ emphasized that illegal gambling remains a priority for federal law enforcement.
Additionally, states like Ohio have taken measures to block access to offshore platforms such as Bovada, aiming to protect consumers and uphold the integrity of the legal market.
Innovations in Gambling Offerings
To attract a broader audience, casinos are diversifying their offerings. For instance, local and tribal casinos are investing in family-friendly attractions like water parks and go-kart tracks to appeal to families and encourage longer stays.
Moreover, the integration of live dealer games in online casinos has gained popularity, providing players with an immersive experience that closely mirrors traditional casino environments.
Regulatory Developments
Regulatory actions continue to shape the gambling industry. The Seminole Tribe of Florida recently settled legal challenges regarding exclusive online sports betting rights, paving the way for expanded operations within the state.
Additionally, efforts to legalize sports betting in states like Missouri are gaining momentum, with proposed legislation advancing through legislative committees.
The Rise and Scrutiny of Sweepstakes and “Social” Betting Sites
Sweepstakes and “social” betting sites have recently gained popularity in the U.S., especially in states where traditional online gambling and sports betting are restricted or illegal. These platforms allow users to play casino-style games or engage in sports prediction contests, often with the chance to win cash prizes, by offering a “sweepstakes” model. Users can purchase virtual currency or earn it through participation and often redeem it for real money, creating a gambling-like experience without formal wagering.
Legal Loopholes and Regulatory Concerns
These sites exploit a legal gray area by framing themselves as “sweepstakes” rather than true gambling platforms. In this model, users do not directly wager on games of chance; instead, they use virtual tokens and can participate for free by collecting these tokens over time. This setup theoretically sidesteps strict gambling regulations, allowing social casinos and sweepstakes platforms to operate in markets where traditional gambling is prohibited.
However, the popularity of these sites has attracted the attention of regulators and advocacy groups, who argue that these platforms mimic real gambling too closely, potentially fostering addictive behavior and appealing to underage audiences. As a result, some states are revisiting their laws, scrutinizing these platforms to determine if they truly fall within the sweepstakes exemption or if they should be regulated as gambling. States such as Washington and Connecticut have publicly raised concerns about these platforms, leading to legal challenges and renewed discussions around gambling definitions and consumer protections.
Pressure to Strengthen Consumer Protections
Many consumer protection advocates are concerned that these platforms lack safeguards typical of regulated gambling sites, such as self-exclusion tools, spending limits, and mandatory age verification processes. There have been calls for stricter oversight, with some suggesting that sweepstakes casinos adopt similar responsible gambling standards as their traditional counterparts.
Despite the controversy, these social casinos and sweepstakes sites have shown strong user growth, with some brands amassing millions of users across the U.S. The ongoing regulatory discussions may lead to new frameworks governing these sites, potentially requiring licensing or adjustments in their business models to align more closely with state gambling laws.
The U.S. gambling industry is undergoing rapid transformation, characterized by the expansion of legal markets, innovative offerings, and ongoing challenges with unregulated operators. As consumer preferences evolve and regulatory landscapes shift, stakeholders must navigate these changes to ensure a safe and thriving gambling environment.
Tom covers UFC, NFL and MLB for Vegas-odds.com. When he's not writing about sports, he's usually playing poker or betting on the spread. Contributor at GamblingIndustryNews.com and PokerIndustryNews.com
