Publication date: 08 Jul 2022
Online gambling market in the USA is one of the most complex and among the largest in the world. For the last 10 years, it has been developing intensively and now is considered as very promising. Online casinos manage to survive in this highly competitive environment they are under the tough state control and are regulated by sophisticated rules.
Gambling state regulation in the USA
Federal control over the sphere is supported by the states` authorities. Gambling legislative corpus consists of federal and state laws (and other documents) and instructions issued by the Federal Gambling Commission. The main Federal laws and acts which administer this economy sector are:
- 1970 – Illegal Gambling Business Act
- 2006 – Unlawful Internet Gambling and Enforcement Act (UIGEA), which restricts transactions of online casinos and impose bans on some business procedures of the USA banks.
The first online casinos were set up in 1994. Initially, the companies were officially qualified on the Isle of Man for doing business in the gambling sector. Since 1996, it has been an option for them to get a license to work in North America in Canada. When in 2006 the Unlawful Internet Gambling and Enforcement Act (UIGEA) came into force, the USA gambling sector transformed dramatically. People used to transfer money via credit or debit card to pay for the gambling operators` services. Since that turned out to be unlawful (transactions casino – personal banking account were banned), e-wallets and other payment systems of the type came into practice. As a result, depositing or withdrawing money has played havoc with operators. Many of them were obliged to leave the domestic market and penetrate foreign markets.
- Aren`t there any parallels? On March 23, 2021, the State Duma of Russia introduced a bill that would empower the immediate block of websites that support funds transfer for the use of illegal online casinos or lotteries.
At the end of 2011, The United States Department of Justice (DOJ) stated the Federal Law on gambling to be regulating sports betting only. Thus, online lotteries, poker and other games have been understood as separate activities. The gambling industry renaissance age has come. In 2012-13 first legal online casinos appeared in Delaware (DoubleDown Casino), Nevada (Ultimate Poker и Caesars WSOP), and New Jersey.
Online casino regulation in 2021
At the beginning of 2021, almost all states legally approved gambling. The total ban is only in effect in Utah and Hawaii now. Online gambling activities (casino, poker, lottery) are legal in Pennsylvania, New Jersey, West Virginia, Indiana, Iowa, New Hampshire, Nevada, Delaware, Rhode Island, Michigan, Oregon, Colorado, Montana, Tennessee, and Illinois. The Federal Law imposes restrictions on the sector. Firstly, only those who come of age are allowed to gamble (above 21 years). Then, online working conditions as well as licensing terms (issuance of documents and control), are regulated in each case by state laws. That is why the rules of the game in different casinos may differ significantly. Currently, some other states — including California, Florida, and Texas – are fixing to spring up lawful gambling (documents and various forms are being elaborated).
Online casino regulation in 2022
During the 4 years (from 2018) since the legalization of gambling in the US, Americans have spent $125 billion on sports betting. According to the American Gaming Association, 8.8 billion of that was bookmakers’ revenue, while 1.3 billion returned to the states as taxes. And for the first quarter of 2022, US gambling revenue rose 28.6% (compared to the first quarter of 2021) to $14.31 billion: slot machine revenue was $8.19 billion, table games were $2.38 billion, sports betting was $1.58 billion, and another $1.21 billion was gambling. Three states – Arkansas, Florida and New York – set new quarterly revenue records!
In the spring of 2022, several more states in America have announced that they will allow gambling and betting:
- In Kansas, 4 state operators will be able to accept both offline and online sports betting. The state will receive 10% of the bookmaker’s income as taxes.
- In Ohio, acceptance of sports betting will start in January 2023. The state will issue 3 types of 5-year licenses: online betting, retail betting at land-based betting shops and terminal betting. The tax on income from betting will be 10%. The proceeds will be used mainly to finance school education. 2% of the tax revenue will be used to fight gambling addiction. Experts estimate that the annual turnover of sports betting in the state could reach $ 3.35 billion, and the tax revenue will be $ 24 million.
A ninth bookmaker that can legally accept bets has started operating in New York State (US) – gambling operator Bally Bet. The bookmaker is owned by Bally’s, with Caesars Entertainment owning the rights to the brand until 2020. Bally Bet also operates in the states of Arizona, Colorado, Iowa, Indiana and Virginia. It should be recalled that the regulated betting market began operating in New York on 8 January 2022. Caesars, DraftKings, FanDuel and Rush Street Interactive, BetMGM, PointsBet, WynnBet and Resorts World Bet were licensed to operate here. Bookmakers operating in this state are subject to the highest state gross income tax rate in the US at 51%. Operators must pay a $25 million lump sum in order to be allowed to operate.
The state of California (the largest state in the US by population, with 39 million people) has launched a major campaign to legalise online sports betting. About $100 million has already been invested in it. Some of the biggest players on the American betting market took part in it: BetMGM, Bally’s, DraftKings, Penn National, Wynn, Fanatics Betting and FanDuel. Flutter and Entain gambling holdings are planning to spend another $100 million to promote a bill to legalise betting in the state of California. Earlier in May 2022, a petition to legalize online betting in the state of California gathered 1.6 million signatures. The collection of signatures was led by Californians for Solutions to Homelessness and Mental Health Support. If gambling is allowed in California, the cost of a gaming license in the state could be $100 million. At the same time, 10% of the operators’ revenues should go to fund social initiatives, in particular to help the homeless and mental health facilities. Another 15% of BC’s royalties are to be used to economically support local tribal community initiatives.
Online casinos` target audience in the USA
The population of the USA is about 330 million people. The official language is English. But there are a lot of Spanish, Chinese, Tagalog, French, German, Korean, and Russian speakers. RevenueLab represented March 2021 figures that reflected constant and stable growth of the total revenue from gaming. Gaming industry is worth $261 bn now. The Americans, on the whole, are very positive and venturesome. They believe in luck: one should use chances to become rich! That is why they are ready to spend smaller sums in bids to win the money back and even to get more that is why they often carry on playing after losses. Online gambling, which has been permitted comparatively recently, is popular for its novelty and availability (especially, in 2020-21).
- An average salary in the USA is more than 900 dollars a week
- The Internet is permanently used by 88% of the US citizens. 68% prefer mobile internet.
The most popular casino games online are: slot machines, table and card games (poker, dice, Blackjack, Roulette and video poker), Keno, Scratch cards. One of the most popular forms of entertainment in America is the lottery. According to experts, every American spends about $ 200 a year on buying tickets. The industry leaders are Powerball and Mega Millions, which operate in 44 states. These lottery operators support cross-state transactions and are known for drawing the world’s largest jackpots. In addition, the money generated by the lottery giants is redirected to social needs. The best online casinos in the USA offer games from the leading game providers with well-known names and reputation: Rival, RTG, WGS, Bgaming, Slotland and Betsoft.
What are the most popular websites among US residents?
According to Similarweb for May 2022, google.com is the most popular search engine. This is followed by duckduckgo.com, bing.com, google.com.br and predictiondexchange.com.
Among social media, Facebook leads the way, followed by Twitter and then Instagram. Americans also like Reddit and use Discord.
The most popular sites in the gambling category are hdvideosnet.com and effusedprankle.com, the top five are bovada.lv, hczog.com and betonline.ag.
Among online casino sites, bovada.lv tops the list, followed by hczog.com and slots.lv. pulsz.com and rewardsgiantusa.com close the top 5.
Americans bet on sports on hdvideosnet.com, betonline.ag and betus.com.pa takes third place among the leaders. Also, on the list are 1stream.top and revenuenetwork.com.
- Global Wireless Solutions has conducted a study on women’s passion for betting. For 2021, there was a 115% increase in female users downloading sports apps. But men are still outnumbered, with 250% more willing to bet on sports via apps.
- A new YouGov survey (for March 2022) shows that US players have shown a high interest in betting on eSports. Around 11% of those surveyed said they had bet on eSports events at least once during the year. At the same time, a campaign in favour of tougher prosecution of unregulated operators is being launched in the US.
Due to the Unlawful Internet Gambling and Enforcement Act (UIGEA) depositing and withdrawing money through banks is impossible. It is recommended to use payment systems: Neteller, Skrill (Moneybookers), Eco Payz. Most offshore online casinos give consent to cryptocurrencies (Bitcoin, Ethereum, FUN, or Litecoin) as deposit means for players from the United States. Control over cryptocurrencies transactions is executed by the states` authorities and the states` legislative body. Therefore, the use of the cryptocurrencies might alter in different casinos. Money transfers (MoneyGram or Western Union) are allowed. PayPal allows certified gambling merchants to use this service in locations where gambling is lawful.
Gambling Safety in the United States
All online casinos and operators are required to warn players against gambling addiction. If a person is experiencing problems, they can contact the NCPG (National Council on Gambling Problems) service using the helpline. The line is absolutely free and confidential.
Taxation on money prize in the United States
In order to retain the legal status, online casinos work with the IRS tax service to resolve tax issues. Since this is considered a form of income, all winnings are equated to winnings from land-based casinos and are therefore taxed. When registering in a legal online casino, mind, that identification (or verification) is required. Also, 25% withhold imposed by the state on your money prize is standard. Players can also receive an email informing them that they will need to provide tax information before claiming any winnings.
Affiliate marketing and advertising in the United States
Online casinos which are looking for the audience from the United States of America offer partnership programs:
- CPA – cost-per-action accumulative deposit
- RevShare — a percent of money lost by a player (during the entire player`s life).
The limitations on real money games sales have been eased up by Google since March 2021. In the USA, the applications for gambling will be available, provided by Google Play. The US gambling market is developing at a good pace, being promising and profitable at the same time. It is a complex market due to thorough government control and strong competition. If you know more interesting facts on the topic, or you have found a mistake in this text, please, write to us in Telegram.
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