The 2022 Super Bowl was a blockbuster event for the online sports betting industry as user numbers and wagers soared on recently legalised gambling platforms, demonstrating the speed at which legal betting is entering the mainstream in the US. Now, the online casino industry is looking to follow suit with senators already looking to introduce bills to legalise online casinos across a variety of states.

A record-breaking night for sports betting

As the Los Angeles Rams sneaked to victory against the Cincinnati Bengals last month, it was not just LA’s American football fans that were celebrating as the online betting industry saw a record numbers of users and an 80 per cent increase in wagers compared to last year. In the wake of the game, Adam Greenblatt, chief executive of BetMGM, called Super Bowl LVI “the most bet on Super Bowl to date“, with rivals Barstool Sports and WynnBets also describing the game as “a record” and “record-breaking” for their platforms.

Slow, gradual legalisation

Sports betting has been steadily growing in popularity across the US since 2008 when the Supreme Court overturned a ban on operators offering betting opportunities outside Nevada. In the following four years, 31 states have legalised sports betting, with 12 new states legalising the practice in the last year alone, and the pandemic has accelerated adoption as people shifted more of their time and attention online.

Florida and New York were two of the states to legalise sports betting over the last twelve months, and New York has already emerged a dominant market for operators despite an 51 per cent “sin tax” on gross gambling revenues, with New Yorkers already wagering nearly $2bn on a variety of sports.

The huge numbers being reported by the betting industry this year is a major change from little over a decade ago when an NFL spokesman told The New York Times that they were “trying to do whatever [they]can to make sure our games are not betting vehicles”. And the change is especially notable in New York, where gambling is limited to such an extent that the maximum number of casinos allowed within the state is written in its constitution.

How popular are online casino games?

It is difficult to determine how popular online casino games will be in the US, with only a small number of states currently permitting online casinos to operate within their territories. However, other countries around the globe have had a more liberal attitude to online gambling for decades, and the popularity of the various forms of gambling there is likely to have some similarities.

As the US embarks on its online gambling adventure, one market legislators and market analysts are following closely is the UK, which has embraced online gambling since the The Gambling Act became law in 2005. Today, more than 100,000 people work in the UK’s gambling sector, and online gambling operators produce a gross gambling yield (GGY) of over £3.1bn and tax receipts of nearly £900m each year.

Lotteries, such as the National Lottery, are the most popular form of gambling in the UK, but millions of people also engage in sports betting, casino games, and bingo, all of which are legal and regulated. Particularly popular are online slots games such as the Mega Moolah slot machines, which is a progressive slot machine where the jackpot increases each time the game is played but the jackpot is not won. Such games have provided some of the biggest jackpots in online gambling history, with prize money over $20m, but the chances of winning such a payout is millions to one.

Online slots generally have return to player (RTP) ratios of between 80-97 per cent, which is relatively high, but as ever with gambling the house always wins. And slots are certainly not the casino games that have the lowest house edge

Online casinos push for state-by-state legalisation

Back in the early 2000s the US was an early leader in the online casino market as a variety of new operators launched in the wild west of the early internet. However, in 2006 the Unlawful Internet Gambling Enforcement Act essentially destroyed the market by banning payment processing companies from working with gambling sites that are unlawful under any federal or state law. The law itself does not describe which gambling sites are legal or illegal, but it was widely assumed that the Wire Act of 1961 prohibited all forms of online gambling across the entire US, and so 2006 looked like the end of online gambling in the US.

However, in December 2011, the United States Department of Justice released a statement clarifying that the Wire Act only applied to sports betting and did not apply to betting on games of chance such as online casino games, poker, or lottery sites, and left the legislation of such activities to individual states. Over the last decade Nevada, Delaware, New Jersey, Pennsylvania, and Connecticut have all begun the process of legalising and regulating online casino games, and senators from other states are watching these early movers to see whether their state should follow suit.

In the last week, New York Senator Joseph Addabbo introduced a new bill, S8412, which seeks to authorise online interactive gaming within the state. The bill is not expected to pass into law in its current form, but lays much of the groundwork for future legislation that would permit online casinos to operate slots and table games within the state of New York, but under strict conditions and safeguards to protect players and young people. If approved, analysts predict that New York could collect up to $475m in tax revenue and around $150m from licensing fees.

Could we be about to see the golden age of online casinos in the US?

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