The map in 2026
Eight years after Murphy v NCAA, sports betting is legal in thirty-eight states plus the District of Columbia and Puerto Rico, and available online in thirty of them. The remaining holdouts are a mix of the very large (California, Texas), the constitutionally awkward (Georgia, Alabama, Oklahoma), the tribally complex (Minnesota) and the simply uninterested (Utah, Idaho, Hawaii). The most recent large launch was Missouri, whose voters approved sports betting by a narrow margin in November 2024 and whose online market opened on 1 December 2025 with eight operators. 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" per land-based licensee (one, two or 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. Several have loosened toward more competition after early results disappointed.
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 in 2024) or alongside commercial operators (Arizona, Connecticut, Michigan). Lesson five covers the tribal framework.
Retail-only. A few states permit sports betting at casinos and tracks but not online: Mississippi, North Carolina until its 2024 online launch, and others in transition. Retail-only markets are small and most have moved or are moving online.
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; the going rate has ranged from single-digit millions to tens of millions plus a share of revenue in the largest states. 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, Ohio, Illinois, Maryland, Massachusetts and others allow it).
The licence itself is granted by the state regulator after a suitability investigation of the operator, its owners and key personnel, and application and licence fees range from tens of thousands of dollars to, in the largest markets, tens of millions. New York charged 25 million dollars per licence; 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. New York and New Hampshire at 51 per cent (the latter through its lottery contract) 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 2025 added a per-bet tax on top; Ohio doubled to 20 per cent in 2023; Massachusetts, Maryland, Tennessee (which taxes handle rather than revenue), Arizona and Michigan sit between 10 and 20 per cent; Nevada, Iowa and others under 10 per cent. Whether promotional credits are deductible from taxable revenue is a second variable that changes the effective rate by several points, and several states have phased deductions out.
On top of state tax sits the federal excise tax of 0.25 per cent of handle on legal wagers (plus a per-head tax on employees), a relic of 1951 that the industry lobbies to repeal and that on a 7 per cent hold amounts to around 3.5 per cent of revenue. Tax rates above 30 per cent have visible effects: fewer operators, thinner promotions, worse prices for customers, and, the industry argues, 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, New York, Illinois for some markets); player props on college athletes are increasingly restricted after the NCAA's 2024 campaign; betting on the outcome of awards, elections (universally prohibited for sportsbooks) and esports (permitted in some states, not others) varies; and in-play betting, same-game parlays and micro-markets are permitted almost everywhere. Official league data is required for in-play settlement in a number of states, which gives the leagues' data partners a statutory market. Fixed-odds horse racing is a separate authorisation in a few states.
Responsible gambling and advertising
Every state's rules require self-exclusion (state-run lists in most), deposit and time limits, responsible-gambling messaging, and a compliance plan, with the detail varying widely; Massachusetts, New Jersey and Pennsylvania are among the more demanding. Advertising is regulated by each state's rules and by the industry's own code, and the direction since 2023 has been restrictive: "risk-free" language banned in most states, restrictions on college campus marketing, requirements for terms alongside offers, and in several states limits on promotions to customers who have shown signs of harm. The affordability-check model used in Britain has not been adopted; enforcement has focused on advertising and on know-your-customer failures.
The holdouts
California's tribes and commercial operators fought two competing ballot measures to mutual defeat in 2022, and the state's tribes have signalled a possible measure for 2028 on their own terms; in the meantime, prediction markets serve Californian customers with sports contracts under federal cover. Texas requires a constitutional amendment, which the state senate has repeatedly declined to advance; 2027 is the earliest realistic date. Georgia's legislature failed again in March 2026. Minnesota is stuck between tribes and tracks; Oklahoma between tribes and its governor; Alabama between everyone. 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 fifty legal, compliance and tax structures 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 70 per cent or more of most state markets between them, and the consolidation of the 2020s (exits by media brands and second-tier operators) followed from acquisition costs that only the leaders could sustain.
What to take from this lesson
Thirty-eight states plus DC and Puerto Rico permit sports betting; thirty online. 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.