The gambling industry has experienced much change in the past decade. One of the major changes the industry has seen is the introduction of online gambling. So let’s take a closer look at the rise of regulated online gambling in the U.S. and the companies set to profit.
Everything has changed since the U.S Supreme Court struck down the Professional and Amateur Sports Protection Act in 2018. Online gambling is now bigger than ever. States up and down the country have legalized and regulated online gambling. This has helped to create new opportunities for states, consumers and corporations alike.
A shift to mainstream
Before the PASPA was overturned, sports betting was largely confined to Nevada. There were also limited forms of gambling allowed in select states like New Jersey and Pennsylvania. This meant that U.S residents were finding alternative ways to wager. The black market for sports betting was estimated to be worth tens of billions of dollars each year. Offshore sportsbooks and local bookies were able to fill the demand that regulation couldn’t meet.
As of 2025, over 30 states have legalized sports betting in some form. Many states are also allowing online and mobile betting platforms too. States like New Jersey and Michigan have emerged as leaders. Each state generates billions in revenue annually.
This shift to online gambling not only reflects changing legal structures but also a significant cultural evolution. Professional sporting leagues were once wary of gambling. They are now openly embracing it. Media companies integrate betting content into coverage. Even formerly conservative states are exploring legalization, driven by the potential tax revenue and consumer protection.
Why regulation matters
Legalizing online gambling comes with a number of benefits. One of the most important benefits is that it provides consumer protections. Both sportsbooks and online casinos that are fully licensed must follow strict regulations, like ensuring fairness and secure payment processing, as well as promoting responsible gambling practices.
Regulation also brings transparency to the industry. States that monitor betting activity are able to identify and prevent fraud, match-fixing and underage gambling. This level of oversight can help to build trust in the industry, which was largely absent in the days of offshore betting sites.
For state governments, one of the major benefits of regulation is tax revenue. Online casinos and betting sites make billions each year and a portion of that must be paid to the state. For example, in 2024, operators in Michigan paid $466.1 million in taxes and payments to the state. This revenue is then used to fund the state, going towards sectors like healthcare, education and infrastructure.
The tech behind the boom
The success of online gambling wouldn’t be possible without technology. Modern sportsbooks and casinos operate on sophisticated platforms that manage live odds, real-time transactions, user verification, geolocation and data analytics. These systems have to be fast, secure and scalable, especially during peak events like the Super Bowl or March Madness.
AI is also helping many operators leverage artificial intelligence to deliver smarter, more personalized experiences, from recommending games and experiences to detecting unusual activity that could indicate fraud or problem gambling. Some platforms are using it to tailor offers to users. AI can easily analyze a user’s patterns and preferences and create a personalized promo code that suits them. AI is also helping sportsbooks to adjust odds dynamically based on real-time data and betting patterns.
There are also a number of software providers and fintech companies that have emerged to support the industry. Firms like GEOComply (geolocation) have become critical to the infrastructure that supports regulation in gambling.
The companies that are set to profit
With billions in wagers placed annually across both sports and casino platforms. Several companies are poised to benefit the most. This includes:
- DraftKings
- FanDuel
- BetMGM
- Caesars Entertainment
All of these companies are not only leaders in their respective verticals, but are also dominating multiple markets across the U.S. They’ve established strong footholds in key states and are rapidly expanding their reach as legislation evolves.
Challenges and considerations
While the industry has seen a significant amount of success, it still faces many challenges. The legal landscape that surrounds online gambling remains unfinished. Each state has set its own laws and regulations surrounding online gambling. There are some states like New York, Illinois and Colorado where sports betting is legalized and online casinos aren’t. Whereas there are other states like Utah and South Carolina where online gambling is illegal. This makes scaling a national platform more complex. However, there is hope as many states are considering legalizing online gambling after seeing the tax revenue benefits that states like Michigan and Pennsylvania are experiencing.
There are also concerns about gambling addiction. As gambling becomes more accessible with online platforms and smartphones, the risks are increasing. Especially with casino games with rapid-play mechanics, it can be easy to get carried away. This has raised alarms among mental health professionals as well as government officials. The risks that come with gambling are one of the main reasons many states are still unsure about legalizing online gambling. Because of this, most operators are required to promote responsible gambling, offer deposit limits and provide self-exclusion options, but more consumer education is still needed.
The road ahead
The next few years are going to be important for the gambling industry as a whole. As more states consider legalizing both online sports betting and casino gaming. There is major potential in states like California, Texas and Florida as they are still in legislative limbo. All three of these states have shown signs of potentially legalizing online gambling. This could dramatically reshape the industry, especially as these states sit in the top 3 of having the biggest population in the U.S.
Additionally, innovative technologies are also expected to impact the industry. Blockchain technology and cryptocurrency are expected to completely change the way users interact with gambling sites. There are also exciting features like live dealer games, skill-based casino games and live betting are expected to attract a wider audience and help to retain users. Crossovers between gaming, gambling and media will likely deepen, further normalizing online gambling as mainstream entertainment.
The rise of regulated online gambling in the U.S. has completely changed the industry. What was once restricted to physical casinos is now accessible anywhere, anytime on a smartphone or laptop. This new era of gambling offers opportunities and risks in equal measure. It has the power to generate billions in state revenue, create jobs and offer consumers a safer way to enjoy betting. But it also calls for thoughtful regulation and strong consumer protections.
