Online casino expansion stalled across much of the United States even as regulators and operators scramble to adapt to new advertising scrutiny, crypto-enabled platforms and a patchwork of state laws that will shape where real-money iGaming grows next.
Where U.S. legalization stands as of late 2025
Only a handful of states had legalized real-money online casino play by the end of 2025 – Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, Rhode Island and West Virginia – leaving the rest of the country with sports betting but not full iCasino markets. That status, reported in late December 2025, leaves operators and investors focused on incremental state fights and legislative windows in 2026 as the primary route to expansion. [CBS Sports overview of state iGaming status].
Lawmakers in Illinois, Massachusetts, New York and several New England states continued to file bills or hold hearings in 2025, but none secured final approval before year-end. Analysts say revenue and taxation debates, competition with tribal and land-based interests, and political caution after recent blowups over advertising and consumer harm are the main barriers to a faster roll-out.
Regulatory pressure, advertising and consumer protection
Regulators in multiple jurisdictions ramped up scrutiny of gambling advertising and platform safety heading into 2026. In the U.K., public polling and pressure from campaigners pushed ministers at the turn of the year to consider tougher restrictions on gambling ads, particularly across social media and streaming platforms, with advocates urging limits to reduce youth exposure and problem gambling. At the same time, national regulators in the U.S. and Europe have been pursuing enforcement actions and policy reviews aimed at tightening anti-money-laundering and player-protection rules for online casinos – developments that could influence how quickly new states permit iGaming and how operators market their services.
Operators face rising compliance costs: new KYC, transaction-monitoring and advertising constraints can blunt margins and alter rollout strategies. That reality helps explain why several planned launches and legislative pushes stalled in 2025.
Crypto casinos, sweepstakes bans and commercial friction
A parallel development is the rise of crypto-focused casino platforms that advertise fast payouts and minimal KYC routines. These sites have attracted attention and scrutiny from regulators and consumer groups alike, spurring fresh debate about whether cryptocurrencies increase anonymity and money-laundering risk or simply offer innovation in payments. Meanwhile, some U.S. states moved to shut down trickier business models: California enacted laws in 2025 to outlaw “sweepstakes casinos”—a model that had skirted conventional gambling statutes—taking effect in January 2026 and signalling how state-level policy can rapidly reshape local markets.
For operators, the twin pressures of tighter advertising rules and concerns about crypto-facilitated play are changing go-to-market plans. Several major gaming companies have publicly prioritized regulated, licensed growth in proven iGaming states while delaying aggressive pushes into patchwork jurisdictions.
What to watch next
Expect the legislative calendar in state capitols to dominate near-term headlines: which bills advance in Massachusetts, New York and Illinois in early 2026 will determine whether the U.S. iGaming footprint expands beyond the seven existing states. Regulators’ reactions to crypto casinos – and any new rules on gambling advertising – will further influence operator strategies and consumer protections. Industry observers say the next six months will be decisive for whether growth in online casinos proceeds steadily under stricter oversight or fragments further into unregulated niches.
Comprehensive state iGaming status and overview – CBS Sports