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Why Will Some U.S. States Might Never Legalize Online Casinos



Source: (My Canva Pro Account)

In May 2018, the U.S. Supreme Court removed the nation’s ban on sports betting, moving the decision on such activities to the states. At the same time, the door was opened for online casino operators to start doing business on an individual state basis.

At the time this historical decision was handed down, there was little doubt that most states would proceed to pass sports betting legislation. To date, that is precisely what has happened as 37 states have passed sports betting legislation with another 2 states getting close to following suit. What seems to defy logic is fewer than half of these states have not yet passed online casino legislation. Why is that?

The Reluctance of Many States to Pass Online Casino Legislation

Most of the top sports betting operators in the U.S. are full-service operators. Their platforms offer both online sports betting and casino action. One would think that it makes perfect sense for states to pass both forms of online gambling to maximize the generation of gambling-related tax revenue. That is not what has happened in most states, begging the question why?

In fact, there are two key reasons why a lot of states have not yet passed online casino legislation. Here is a look at these two reasons.

Gambling Skill Versus Playing Games of Chance

Of the two reasons states are reluctant to pass online casino gambling legislation, one reason is simple to understand while the other reason is mired in complications.

The simple reason is many legislators in many states have an aversion to passing legislation that would allow its residents to “gamble” on pure games of chance. In fact, all casino games (slots, table games, video poker, and scratch cards) are games of chance. The game outcomes are determined by random number generators, which removes the likelihood there would be any skill set that players could use to gain an advantage over the house.

Games such as these are often heavily promoted by no deposit casinos that provide welcome bonuses to incentivize new players. This still allows for the house advantage but gives would-be gamblers the opportunity to try their luck first without setting up a bankroll.

Contrast these games of chance with skill-based gambling such as sports betting and you’ll understand why there isn’t as much opposition . It’s because sports bettors can develop handicapping skills that will help them become better gamblers. Sure, some luck is still involved, but sports bettors can make their own luck by doing some handicapping work and developing a strategy.

Commitments to Native American Tribes

The other reason is complications caused by existing laws. To understand this, one needs to look at U.S. history.

During the latter portion of the 19th century, white settlers began gobbling up land that belonged to Native American Indian Tribes. After settlements were established, the U.S. government went back to the Tribes and offered some amends in the form of treaties and congressional acts. As part of these treaty compacts, the Federal government established Indian reservations that even today allow most Tribes to self-govern. There is another critical provision attached to many of these compacts, a provision that stands in the way of legalized online casino gambling.

You see, Tribal leaders were very astute back in the day. They knew full well that the “white man” loved to gamble. Using this knowledge, one Tribe after another sought exclusive rights to offer retail casino gambling on their reservations. The intent was to develop retail casinos that would generate income for Tribes in their respective areas. This income was then to be used to support respective Tribe members. At no time did anyone ever imagine people would have computers much less be gambling via their computers.

With these compacts in place, retail casinos did pop up on reservations throughout the country. Yes, they began generating lots of income, enough “non-taxable” income to make some Tribes wealthy beyond their dream. Therein lies the rub. This is not income they are willing to give up.

In many states, things started getting complicated when legislators started thinking about the legalization of online casino gambling. The barrier they have consistently been encountering is a “no-go” from Indian Tribes. Because of their compacts, many Tribes have been aggressively protecting their revenue streams by refusing to allow the onset of online casino gambling in their respective states.

What’s Next For Online Gambling Legalization?

A couple of things are very clear. First, U.S. residents want the right to play online casino games of chance for real cash. Second, legislators in states with enforceable Indian compacts are having trouble delivering what their residents want.

To be clear, several attempts have been made to bypass compacts under the guise online casino operators would be operating away from reservations. In many states, that argument has fallen flat.

In states like Oklahoma, Florida, and California, legislators are looking for resolutions or compromises. For some Tribes, there is no room for negotiation, and that’s why some states will never legalize online casino gambling.

In other states, there appears to be some interest in compromising. However, Tribes seem to be demanding the right to control both retail and online gambling access in their respective states. In their minds, it’s the only way they can prevent online casino gambling from interfering with their retail casino gambling activities.

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