1. Bringing online gambling under the legislation will help create a favorable atmosphere for players. Until now, New Jersey, Nevada, and Delaware are the only states where online casino-style gambling is legal and regulated. Pennsylvania joined the list on July 15 with the soft launch of two online gambling portals, with a third one set to launch.
2. If all 50 US states decide to legalize online gambling and are included in the estimation, the Internet gambling market in the US will be worth double or about $10.7 billion. Compared to a previous report from Morgan Stanley, the predicted revenue of $5.2 billion is lower than the projected revenue of about $8 billion.

According to GC, one or more Wave 2 states would pass an online gambling bill by 2017, and one or more of the Wave 3 states would pass online gaming legislation by 2020. Here is where these states currently stand and their prospects for iGaming expansion by 2020. ‘Wave 2’ candidates Pennsylvania (GamblingCompliance estimate 2015-2016).

- September 17, 2014 By Oliver Young -

California is the fourth in line US state to legalize online gambling in 2015

According to a recent report from Morgan Stanley, a financial services corporation based in New York, it is predicted that 20 US states will legalize and regulate online gambling by the end of 2020.

Morgan Stanley believes that the 20 states that will regulate iGaming will generate revenue of approximately $5.2 billion by the end of the decade. If all 50 US states decide to legalize online gambling and are included in the estimation, the Internet gambling market in the US will be worth double or about $10.7 billion.

Compared to a previous report from Morgan Stanley, the predicted revenue of $5.2 billion is lower than the projected revenue of about $8 billion. According to the report, the corporation lowered the estimated figures in order to better reflect the insights gained from the observation of the first three-month operations of the states that have already regulated iGaming, namely Delaware, Nevada and New Jersey.

Which Are the Projected 20 US States?

Morgan Stanley believes that the US state to legalize online gambling in 2015 is California and the launch of the first gambling website will take place the following year. The California Conference on Online Gaming in May already expressed its positive views about regulating online gambling in the state. The next states to join the regulated online casino and gambling industry in 2016 are Pennsylvania, New York and Illinois, while the grand opening will take place in 2017. The following year, Morgan Stanley predicts that Massachusetts, Colorado and Iowa will finally approve online gambling and invite their residents to play online casino games and other gambling products.

Afterwards, next on the line are Ohio, Maryland, Michigan, Florida and Connecticut. By the end of 2020, Morgan Stanley believes that people from Rhode Island, West Virginia, Louisiana, Missouri and Mississippi will be allowed to place online wagers.

In its report Morgan Stanley takes into consideration that there are commercial casinos as well as casinos run by Indian tribes that are currently in operation in 39 states. It is also predicted that the states that don’t have casinos would less likely legalize online gambling.

Another factor taken into consideration is that federal lawmakers will likely oppose to regulating iGaming and this will provide a sort of blanket regulation.

There Are Still Not Enough US States

The findings and figures of the report are quite plausible and interesting even though they are just estimates that may change in future. Whether 20 US states will regulate online gambling in six years is truly a matter of debate. In addition, it is a lot considering the fact that only three US states have already legalized iGaming, but it is a little when realizing that it represents only 40% of the US.

If the predictions of the report become reality, then there will be too many players in too many states that will not have the necessary protections and safeguards. In addition, the players that live in states that will enact online casino legalization are apparently in for a long waiting period.

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Chris Krafcik of GamblingCompliance recently testified in front of the California Assembly Governmental Organization Committee on the current and future state of legal online gaming in the United States.

The presentation by Krafcik, GC’s research director, included several predictions about legalized online gaming in the U.S.

Krafcik called the current efforts in Pennsylvania, California and New York “Wave 2” of online gaming expansion in the U.S., which he characterizes as the time period from now until 2017. Krafcik went on to name four potential contenders (Rhode Island, Connecticut, Illinois, and Ohio) for what he is calling Wave 3, the period between 2018 and 2020.

According to GC, one or more Wave 2 states would pass an online gambling bill by 2017, and one or more of the Wave 3 states would pass online gaming legislation by 2020.

Here is where these states currently stand and their prospects for iGaming expansion by 2020.

‘Wave 2’ candidates

Pennsylvania (GamblingCompliance estimate 2015-2016)

Pennsylvania continues to look like the country’s best bet to legalize online gaming, but time is starting to run out on hopes for 2015.

If online gaming is going to be legalized in Pennsylvania it will almost certainly come via inclusion in the state’s budget. But Gov. Tom Wolf and Republican lawmakers are at an impasse over a budget that was supposed to be approved earlier this week. And there are still several wrinkles that need to be ironed out among legislators and casino operators.

The good news is, iGaming in Pennsylvania is starting to look like an inevitability; a case of, “if not this year than next.”

Why is there so much optimism in Pennsylvania? 11 of the state’s 12 casinos are on board. Lawmakers are pushing for gaming expansion. Regulators are confident they can handle it.

US Poker Prediction: Pennsylvania will legalize online gaming in 2015 or 2016.

California (GamblingCompliance estimate 2016-2017)

California continues to confound iGaming analysts. The state begins each year filling us full of hope and optimism that this will be “the year” for California and they’ll pass an online poker bill before pulling the rug right out from under us.

There are currently two and possibly three unresolved issues preventing California from passing an online poker bill:

1. Does California need a bad actor/tainted asset clause?
2. What role should the state’s horseracing industry play?
3. Potential issue: Who will regulate the online poker sites?

Because of points 1 and 2 above, California appears to be at an impasse when it comes to online poker expansion. And even if these issues get resolved, point 3 could quickly rear its head when a bill starts to pin down specifics.

For iPoker to pass by 2017, there is going to have to be a dramatic change by one of the factions, and there has been no indication that anyone is ready to compromise to that extent.

US Poker Prediction: California will legalize online gaming no sooner than 2017.

New York (GamblingCompliance estimate 2016-2017)

New York is a bit of a long shot for expansion in 2016 or 2017 in my opinion.

For New York to join the ranks of regulated online gaming jurisdictions, a number of lawmakers in the Empire State have indicated they must first get their brick and mortar casinos up and running.

Even when this occurs, lawmakers will likely want to see a couple years of revenue results before voting on another expansion of gaming in the state.

In New York’s favor, lawmakers in the Assembly (J. Gary Pretlow) and Senate (John Bonacic) have introduced online gaming bills in 2014 and/or 2015. Thus far, these bills haven’t gained any traction, and even Pretlow is somewhat pessimistic about expansion in the near term.

Should More States Legalize Online Gambling Bills

On the lobbying front, MGM is making a strong push for iGaming expansion through their Let NY Play campaign, but MGM was also passed over for one of the state’s land-based licenses, which might quell their push.

US Poker Prediction: New York will legalize online gaming no sooner than 2017.

‘Wave 3’ candidates

Connecticut (GamblingCompliance estimate 2018-2020)

Even though there is little public push for online gambling expansion in Connecticut, the state is a solid choice to pass an online gaming bill by 2020. The reason for this optimism has to do with the gaming dynamics in the state.

Foxwoods and Mohegan Sun have a veritable monopoly on legal gambling in Connecticut and seem to be behind just about every gaming expansion discussion.

In fact, Connecticut might even sneak into Wave 2 if Foxwoods and Mohegan Sun decide they’re interested in iGaming expansion. That speculation is based on comments by Foxwoods Director of Administration of Interactive Gaming Frank Pracukowski, who told attendees at the C5 Online Gaming Conference the state has told the two Indian tribes, “When you’re ready [for online gaming] you come to us.”

If the Pequot and Mohegan tribes decide they want online gambling, it might breeze through the legislature very quickly.

US Poker Prediction: Connecticut could legalize online gaming as soon as 2016.

Rhode Island (GamblingCompliance estimate 2018-2020)

Because of the state’s small size (less than 1 million residents) Rhode Island will need several things to occur before they even consider passing an online gaming bill:

1. Multiple other states to pass online gambling bills
2. A willingness from these states to enter into interstate agreements with Rhode Island.

US Poker Prediction: Rhode Island will legalize online gaming no sooner than 2018.

Illinois (GamblingCompliance estimate 2018-2020)

Illinois is another state that could leapfrog some other contenders in the next couple years.

The state has already legalized online lottery sales, and this expansion has started paying massive dividends. The success of Illinois iLottery might accelerate the state’s timeline for online casino and/or poker.

Should More States Legalize Online Gambling Rules

There hasn’t been any recent iGaming expansion talk, but there has been some in the past, so the framework for a bill has already been laid.

Should More States Legalize Online Gambling Sites

US Poker Prediction: Illinois could legalize online gaming as soon as 2017.

Ohio (GamblingCompliance estimate 2018-2020)

A bit of a dark horse on GamblingCompliance’s list, Ohio looks like a good candidate on paper, considering the state has a strong brick and mortar casino industry and is looking for new revenue streams.

However, there has been little public mention of iGaming expansion in Ohio to date.

Furthermore, gaming expansion (of any kind) has been a hot-button issue. Current Governor John Kasich tried to expand gaming in the state early in his tenure by adding video lottery terminals at seven of the state’s racetracks, but the move has been met with stiff resistance and is currently being settled in court.

Obama Legalize Online Gambling

Online expansion would likely meet a similar fate, and with the Governor entertaining runs for higher office, it’s unlikely he’ll want to talk about iGaming until after the 2016 elections.

US Poker Prediction: Ohio will legalize online gaming no sooner than 2018.

Should More States Legalize Online Gambling Winnings

Photo by Niklas Morberg used under license CC BY-SA 2.0.

Should More States Legalize Online Gambling Laws