As the debate over legalising online casino gambling continues to stall in many U.S. states, the National Council of Legislators From Gaming States (NCLGS) has stepped up with a proposed framework aimed at addressing longstanding concerns in the iGaming industry. But despite efforts to create a more cohesive and reliable structure, some casino operators remain unconvinced.
Efforts to Legalise Online Gambling Remain Stagnant
While the U.S. has seen a surge in regulated sports betting, the momentum for online casino gambling has been sluggish. As of December 1, only seven states—New Jersey, Pennsylvania, Michigan, West Virginia, Delaware, Connecticut, and Rhode Island—have implemented fully regulated iGaming operations. The calendar year will end with no new states legalising online casinos, a significant pause in a sector that many expect to grow exponentially.
At the NCLGS Winter Meeting in New Orleans, industry leaders and legislators convened to discuss the future of online gaming in the U.S., hoping to break the impasse. The NCLGS’s proposed Modern Internet Gaming Act (MIGA) has been developed by a multi-state committee, hoping to provide the legal and regulatory framework needed to ensure fair play, taxation, and consumer protection across state lines.
Despite the optimism surrounding MIGA, the new legislation is far from a consensus solution. Some casinos, particularly those that have thrived in traditional in-person gaming environments, express reservations. They argue that the bill fails to address the core issues they face, such as how to balance the interests of online operators with those of land-based casinos.
The NCLGS’s MIGA Draft: A Step Forward?
The MIGA framework is a comprehensive attempt to standardise the rules governing online gambling across the U.S. It seeks to mitigate concerns surrounding consumer protection, underage gambling, and market integrity. Some of the notable provisions include enhanced player identification protocols, the prohibition of certain predatory marketing practices, and stringent age verification checks.
One of the core goals of MIGA is to create a unified set of rules that would apply across multiple jurisdictions, facilitating interstate compacts for online gaming. This would allow states with regulated online gambling markets to share player pools, improving liquidity and attracting more customers.
In the draft proposal, the NCLGS highlights the importance of allowing states to maintain control over their markets, while simultaneously creating a standardised approach that would make the industry more attractive to both consumers and operators. For example, a tax structure could be designed to benefit states while still making the industry profitable for operators.
However, the proposal also has its critics. Some argue that the legislation is too focused on consumer protections at the expense of operators’ interests. These critics point out that land-based casinos, which have long been a cornerstone of the U.S. gaming economy, might be left at a disadvantage in the digital realm. Without significant safeguards, there’s a real fear that online operators could dominate, pushing traditional casinos to the periphery of the market.
The Roadblocks Remain
Despite the NCLGS’s proactive stance, the fact remains that the online gambling market in the U.S. is still in its infancy. One key issue is the slow pace at which states are choosing to adopt regulated online gaming. Many states have been reluctant to legalise online casinos, citing concerns over gambling addiction, the effect on existing brick-and-mortar casinos, and the challenges of policing the industry.
In recent years, several attempts to expand iGaming legislation have failed, even in states with established legal frameworks for sports betting. Political gridlock, regulatory concerns, and opposition from traditional casino operators have all played a role in slowing progress.
Some casinos, especially those operating in states where they dominate the market, argue that legalising online casinos could cannibalise their business. They are especially concerned that the convenience of online gambling will lure players away from land-based venues, negatively impacting their revenue streams. For these operators, the NCLGS model may feel like a compromise that could tip the balance too far in favour of online platforms.
Will MIGA Be the Solution?
As we enter the final month of 2024, the future of iGaming in the U.S. remains uncertain. The NCLGS’s draft legislation may help spark further discussion, but it remains to be seen whether it can overcome the entrenched opposition and gain traction among lawmakers.
The primary challenge is convincing both legislators and casino operators that online gaming can be beneficial for everyone involved. The question is: how can the NCLGS bridge the divide between land-based casinos and the growing iGaming industry?
For now, states will continue to look to New Jersey, Pennsylvania, and Michigan as the leaders in iGaming, observing how they manage to balance innovation and regulation. If the NCLGS’s proposed framework proves successful in these states, it could offer a model for others to follow. But until then, the road to nationwide online casino regulation will remain a tough one to navigate.
