The history of online gambling in the USA has been a rollercoaster ride of mind-bending growth, legal crackdowns, and recent efforts to make the federal overreach right state by state. From the early days of offshore casinos in the 1990s to the rise of legal U.S. online casinos and sportsbooks, the landscape has changed dramatically.
In this walk down memory lane, we’ll take a look at how online gambling in America started, the laws that shaped its development, and what the future holds for players in states where online casinos are now legal.
The Early Days: The Birth of Online Gambling (1990s – Early 2000s)
The First Online Casinos and Poker Sites
Online gambling began in the mid-1990s, with the first virtual casinos launching overseas. In 1994, Antigua and Barbuda introduced the Free Trade & Processing Zone Act, allowing the licensing of online casinos. This paved the way for the first real-money gambling sites, including:
- InterCasino (1996): One of the first fully functional online casinos.
- Planet Poker (1998): The first real-money online poker room.
By the early 2000s, offshore sportsbooks and casinos were accepting American players, offering slots, blackjack, roulette, and poker. However, since there were no federal laws specifically allowing online gambling, many of these sites operated in a legal gray area.
The First Crackdown: UIGEA and the Fight Against Offshore Gambling (2006)
The Unlawful Internet Gambling Enforcement Act (UIGEA)
In 2006, the U.S. government took its first major step toward restricting online gambling by passing the Unlawful Internet Gambling Enforcement Act (UIGEA).
This law did not ban online gambling outright but prohibited banks and financial institutions from processing payments to unlicensed gambling websites. As a result, major operators like PartyPoker and 888Poker exited the U.S. market, while some offshore sportsbooks and casinos continued operating. Despite UIGEA, many Americans still played at offshore casinos and poker sites, as enforcement was difficult. This set the stage for a much bigger crackdown in 2011.
Controversy Around UIGEA – Was It an Attempt to Protect the Big Casinos’ Turf?
The Unlawful Internet Gambling Enforcement Act was pushed through Congress by Republican Congressman Jim Leach, who framed the bill as a measure to protect Americans from the dangers of online gambling. However, what many don’t realize is that another key figure behind UIGEA’s passage was former Senate Majority Leader Bill Frist, who inserted it into the SAFE Port Act at the last minute—an unrelated anti-terrorism bill that lawmakers had no choice but to pass. Frist, who had ties to major casino donors in Las Vegas, helped UIGEA become law, effectively driving offshore gambling operations underground while protecting powerful U.S. casino interests.
Adding to the intrigue, Michael Brown, a lobbyist with deep connections to organized crime, was also involved in pushing anti-online gambling legislation around the same time. Some industry insiders have speculated that UIGEA’s real purpose wasn’t just about consumer protection, but that it was really about eliminating online competitors to benefit certain well-connected, land-based casino groups. While there’s no direct proof of mob influence, the convenient alignment of interests between U.S. lawmakers, casino magnates, and organized crime figures certainly raises some eyebrows.
The Black Friday Scandal: Online Poker’s Biggest Shutdown (2011)
On April 15, 2011, the U.S. Department of Justice (DOJ) cracked down on three major online poker sites, seizing their domains and freezing player funds.
The sites affected:
- PokerStars
- Full Tilt Poker
- Absolute Poker
These platforms were accused of fraud and illegal payment processing, marking one of the darkest days in U.S. online gambling history. Thousands of American players lost access to their funds, and trust in offshore gambling sites plummeted. However, this event also led to increased discussions about regulating online gambling in the U.S., rather than banning it entirely.
The Turning Point: State-Level Legalization Begins (2013 – Present)
New Jersey, Nevada, and Delaware Lead the Way
After years of uncertainty, the first U.S. states began legalizing online gambling in 2013:
- New Jersey: Legalized online casinos and poker.
- Nevada: Allowed online poker but not full online casinos.
- Delaware: Became the first state to offer online casino games and poker.
This shift signaled a new era for legal online gambling, and more states followed. You can check out the latest US online gambling laws state by state here.
The Supreme Court Overturns PASPA (2018): A Sports Betting Revolution
A major turning point came in 2018, when the U.S. Supreme Court overturned PASPA (the Professional and Amateur Sports Protection Act). This ruling allowed individual states to regulate online sports betting, leading to the rapid expansion of legal online sportsbooks.
Since then, over 30 states have legalized online sports betting, while several states have also approved online casinos, including:
- Pennsylvania (2019)
- Michigan (2021)
- Connecticut (2021)
Today, the legal U.S. online gambling market is growing fast, with more states considering legalization. New Jersey took the first step, and once the other states saw the revenue rolling into the Garden State’s coffers, it was only a matter of time before they went for it.
The Present & Future of Online Gambling in the U.S.
Current State of U.S. Online Casinos
As of 2025, legal online casinos operate in:
- New Jersey
- Pennsylvania
- Michigan
- Delaware
- West Virginia
- Connecticut
Meanwhile, states like New York, California, and Florida are debating legalization, meaning the market could expand even further. There are also many offshore casino sites serving players in states that haven’t legalized it yet. They exist in a sort of legal grey area, though.
What’s Next for Online Gambling in the U.S.?
The future of online gambling in the U.S. looks promising, with several key trends emerging:
- More States Legalizing Online Casinos: Experts predict that New York and Illinois may legalize online casinos next.
- The Growth of Live Dealer Games: Live dealer blackjack, roulette, and baccarat are becoming more popular.
- Crypto & Blockchain Gambling: Bitcoin casinos are gaining traction, but regulations remain unclear.
- Improved Player Protections & Responsible Gambling Measures: Expect stronger safeguards to prevent problem gambling.
Conclusion
The history of online gambling in the USA has been a wild ride shaped by regulatory battles, technological advancements, and changing public attitudes. From its offshore origins in the 1990s to the 2006 UIGEA crackdown, to state-level legalization in the 2010s and beyond, the industry has changed a lot over the past two or three decades.
Today, legal online casinos and sportsbooks are thriving in multiple states, and more are expected to join the market in the coming years. Whether you’re looking for the best US-friendly online casinos, bonus codes, or just to know what the legal situation is in each state, GamblersPro.com will keep you informed.
Greg has been an avid gambler for over 15 years. He loves slot machines and betting on football. He’s been writing on the subject for close to a decade now and knows everything there is to know about video slots, jackpots, and slot sites in general! He has been writing for GamblersPro.com for over five years now.
