The map in 2026
Eight years after the Supreme Court's decision in Murphy v NCAA (May 2018), which struck down the federal ban on state-authorised sports betting, the American Gaming Association counted legal sports betting in thirty-nine states plus the District of Columbia at the close of 2025, with statewide online betting in thirty-one of those states and the District of Columbia. Puerto Rico also authorises sports betting both in person and online under Law 81 of 2019. The remaining holdouts are a mix of the very large (California, Texas), the constitutionally or politically awkward (Georgia, Alabama, Oklahoma), the tribally complex (Minnesota) and the long resistant (Utah, Idaho, Hawaii). The most recent large launch was Missouri, whose voters narrowly approved a constitutional amendment in November 2024 and whose market opened on 1 December 2025 with eight mobile platforms and eight casino sportsbooks. No state passed new sports betting legislation in 2025, the first such year since 2018. The map is now mature enough that the interesting questions are not which state is next but how the existing regimes differ, and what those differences do to the business.
The four models
Commercial mobile with casino tethering. The dominant model in the large markets. The state licenses a limited number of online sportsbooks, each of which must partner with (be "tethered to") a licensed land-based casino, racetrack or, in some states, a professional sports team or venue. New Jersey, Pennsylvania, Michigan, Illinois, Indiana, Colorado, Arizona, Ohio, Massachusetts, Maryland and Missouri follow this pattern with variations. The number of "skins" each land-based licensee may host (Kentucky, for example, allows each racetrack up to three) sets the market's operator count; the tethering requirement gives land-based incumbents a rent from every online operator and was the political price of legalisation.
Lottery-run or lottery-contracted. The state lottery operates or contracts sports betting, often with a single or limited number of online providers. New Hampshire, Rhode Island, Oregon, Montana, Delaware and the District of Columbia use versions of this model, usually with higher effective tax rates and fewer operators. Some have loosened toward more competition: the District of Columbia, whose citywide mobile market was a single lottery-run platform until 2024, now licenses several commercial sportsbooks partnered with sports teams or venues.
Tribal. Sports betting runs through tribal compacts, either exclusively (Florida, where a single tribe holds statewide online exclusivity under its 2021 compact, upheld after litigation that ended when the Supreme Court declined to hear a challenge in June 2024) or alongside commercial operators (Arizona, Connecticut, Michigan). Lesson five covers the tribal framework.
Retail-only. A number of states permit sports betting only in person, at casinos, tracks or tribal venues: Mississippi, Nebraska, New Mexico, North Dakota, South Dakota, Washington and Wisconsin among them, with betting apps in some of these usable only on the premises. North Carolina was tribal retail-only until its 2024 online launch. Retail-only markets are small.
Licence structure and market access
Market access is the American industry's term for the right to operate online in a state, and it is scarce by design. An operator wanting to launch in a tethered state must secure a skin from a land-based licensee, for which it pays an upfront fee and a revenue share, or a fixed annual fee, or an equity arrangement, on terms negotiated privately and priced according to the size of the state. Land-based operators with casinos in many states have monetised their access portfolios; national online brands have assembled access state by state through such deals, through acquiring land-based assets, or through partnerships with sports teams where the state's law permits team tethering (Arizona, Missouri, North Carolina, Virginia and the District of Columbia among them).
The licence itself is granted by the state regulator after a suitability investigation of the operator, its owners and key personnel, and initial licence fees range from a few hundred dollars (Nevada charges $500) to millions of dollars in the largest markets. New York charges each mobile platform provider a one-time fee of 25 million dollars; Pennsylvania 10 million; most states charge far less. Annual renewal fees and the cost of the state's regulatory oversight are added.
Tax
State tax on sports betting is charged on gross gaming revenue (handle less winnings paid), sometimes with promotional deductions, and the rates span an extraordinary range. In the American Gaming Association's 2025 table, New York (51 per cent of online revenue) and the lottery-run markets of Rhode Island (51 per cent) and New Hampshire and Delaware (a 50 per cent state share) sit at the top; Pennsylvania at 36 per cent; Illinois moved in 2024 to a progressive scale from 20 to 40 per cent and in July 2025 added a per-bet tax on top, 25 cents on each online bet and 50 cents after an operator's first 20 million bets in a year; Ohio doubled to 20 per cent in 2023; Massachusetts and Maryland (20 per cent on online revenue, Maryland's raised from 15 per cent in 2025) and Arizona (10 per cent online) sit between 10 and 20 per cent; Tennessee taxes handle rather than revenue, at 1.85 per cent; Michigan (8.4 per cent), Nevada and Iowa (6.75 per cent) sit under 10 per cent. Illinois, Louisiana, Maryland and New Jersey all raised sports betting taxes in 2025. Whether promotional credits are deductible from taxable revenue is a second variable that changes the effective rate by several points, and states have been phasing deductions out: Colorado prohibits them altogether from 1 July 2026.
On top of state tax sits the federal excise tax of 0.25 per cent of the amount of each wager authorised under state law (plus a 50 dollar annual tax on each person engaged in receiving wagers), a tax the 1954 Internal Revenue Code levied at 10 per cent and and which a 1982 amendment cut to 0.25 per cent for state-authorised wagers from 1983; on a 7 per cent hold it amounts to around 3.5 per cent of revenue. The industry argues that high tax rates mean fewer operators, thinner promotions, worse prices for customers and more leakage to offshore sites and prediction markets.
Products and their rules
States differ on what may be bet on. Betting on in-state college teams is prohibited in several states (New Jersey and New York among them; Illinois bars it online only); player props on college athletes are barred in more than a dozen states, including New York, Ohio, Pennsylvania and Massachusetts; betting on the outcome of awards, elections and esports (permitted in some states, not others) varies; and in-play betting, same-game parlays and micro-markets are widely permitted. Official league data is required in a number of states, among them Arizona, Illinois, Michigan, Missouri, New York and Virginia, which gives the leagues' data partners a statutory market.
Responsible gambling and advertising
Every commercial gaming jurisdiction requires operators to run a self-exclusion programme, most with a central self-exclusion register; 29 require tools for players to limit deposits, wagers or time, and 28 require an approved responsible-gambling plan, with the detail varying widely. Colorado, Massachusetts, New Jersey and North Carolina go further, requiring operators to use data and automated triggers to identify players for intervention. Advertising is regulated by each state's rules and by the industry's own code, and the direction since 2023 has been restrictive: the industry's code, updated in March 2023, bars "risk free" language, advertising on college campuses and in college media, and endorsement deals with amateur athletes, and 34 jurisdictions have specific restrictions on advertising content. Britain's model of financial risk checks has no direct American equivalent; the emphasis has been on advertising rules, limit-setting tools and self-exclusion.
The holdouts
California's tribes and commercial operators fought two competing ballot measures to mutual defeat in November 2022: Proposition 26 (in-person betting at tribal casinos and tracks) won 33 per cent of the vote and Proposition 27 (online betting) under 18 per cent. In the meantime, prediction markets serve Californian customers with sports event contracts under federal commodities regulation; Flutter, FanDuel's owner, describes offering them where online sports betting has not been regulated at state level. Texas requires a constitutional amendment, which the state senate has repeatedly declined to advance; with the legislature meeting in regular session only every two years, 2027 is the earliest realistic date. Georgia's legislature failed again in March 2026, when a proposed constitutional amendment won 63 votes in the House against the 120 it needed. Minnesota, Oklahoma and Hawaii considered bills in 2025 that did not pass; in Oklahoma the House and Senate passed rival versions, one for tribes only and one adding a single mobile licence, and could not reconcile them. Alabama remains closed. The remaining states are small.
What the state map does to the business
The state-by-state model produces an industry unlike Europe's. Operators need a separate legal, compliance and tax structure for every state rather than one; market access is a capital cost that favours the largest players; tax rates shape product and promotion state by state; and interstate liquidity does not exist for sports (each state's book stands alone), so scale comes from brand and technology rather than from pooling. The largest operators hold most of the market: Flutter reported that FanDuel alone had about 41 per cent of online sports betting gross gaming revenue in the states where it was live in 2025, and the costs of market access and customer acquisition weigh most heavily on smaller operators.
What to take from this lesson
Thirty-nine states plus DC permit sports betting, thirty-one of those states with statewide online betting, and Puerto Rico authorises it too. The models are commercial mobile tethered to land-based licensees, lottery-run, tribal and retail-only, and market access under tethering is a scarce, expensive asset. Tax ranges from under 10 to 51 per cent of revenue with a federal excise on top, and the rate shapes competition and promotion. Product rules, responsible-gambling requirements and advertising codes vary by state and have tightened since 2023. California, Texas and Georgia remain the large holdouts, with prediction markets filling the gap.