Will 2025 Be the Year of Online Gambling Expansion?

As state legislatures across the United States prepare to open their 2025 sessions, the gambling industry faces a critical moment. Despite years of discussion and debate, no state added online casino gaming or new forms of digital sports betting to its offerings in 2024. This year, the industry’s advocates hope for breakthroughs, but skepticism remains.

State Focus

The lack of progress in 2024 was notable. States like Ohio, Illinois, and Michigan entertained proposals to expand online gambling, but none crossed the legislative finish line. Advocates like Brandt Iden, vice president of government affairs for Fanatics Betting & Gaming, point to the potential benefits: significant tax revenue, improved consumer protections, and job creation. However, speaking at the Global Gaming Expo (G2E) in October, Iden tempered expectations for 2025. “This budget cycle? Probably not,” he said, emphasizing that states don’t currently face the fiscal pressures that often drive gambling expansions. Yet, as pandemic relief funds dry up, he predicts a “cash crisis” could change the conversation in the next two years.

Two states expected to consider gambling expansions in 2025 are Alabama and Texas. Neither currently offers much in the way of commercial gambling. Alabama’s options are limited to parimutuel betting and historic horse racing machines, while Texas has only a state lottery. Both states have previously entertained comprehensive bills that included retail casino-resort destinations and sports betting, but iGaming has not yet been a priority. Whether 2025 will see a shift toward online platforms in these conservative states remains uncertain.

In states where iGaming is already legal, the focus has shifted to tax policy and market dynamics. Michigan, one of seven states with legal online casinos, narrowly avoided a tax hike on online gambling revenue when a proposed 1% increase expired at the start of the new year. This follows a trend seen in Ohio and Illinois, where governors successfully pushed through higher taxes on digital wagering. Industry stakeholders are watching closely, as these developments could influence legislative strategies in other states.

Ohio, in particular, has been a focal point for digital gambling. After launching online sports betting in 2023, the state has taken a deliberate approach to regulation, including increased tax rates and tightened advertising guidelines. Although an online casino bill expired in 2024, Ohio’s thoughtful regulatory framework suggests iGaming could re-emerge as a legislative topic this year.

Illinois also remains a key player. While three iGaming bills introduced in 2024 failed to gain traction, the state has a history of embracing gambling as a revenue source. Illinois was an early adopter of digital sports betting, launching retail and online platforms in 2020. With 16 retail casino licenses now issued, online casinos appear to be a logical next step for lawmakers seeking additional tax revenue.

Alternative Options

Other states are also exploring iGaming, albeit cautiously. In Indiana, lawmakers have long debated the issue but have yet to act, even after a 2024 study projected that gross gaming revenue could exceed $2 billion within three years of legalization. Louisiana’s legislature held its first educational session on iGaming in December, highlighting both the potential tax benefits and the social costs. The Cordish Companies, a prominent casino operator, voiced strong opposition, likening online gambling to “gambling fentanyl” and arguing that the societal risks outweigh the rewards.

Maryland offers another example of iGaming’s polarizing nature. In 2024, the state’s House of Delegates passed an online gambling bill, only for it to die in a Senate committee. Concerns over cannibalization of brick-and-mortar casinos were central to the debate, driven in part by lobbying from The Cordish Companies. Any gambling expansion in Maryland must ultimately go to voters, meaning the earliest opportunity for legalization is November 2026.

In Virginia, momentum appears to be building. A bill prefiled in December 2024 proposes statewide iGaming regulation with a 15% tax rate. The legislation would allow operators to offer up to three online platforms, with revenue partially earmarked for responsible gambling initiatives. Meanwhile, Wyoming is revisiting online gambling after a 2024 study projected significant tax revenue potential. Legislators in the state have expressed interest in reintroducing proposals, citing both economic and regulatory benefits.

This budget cycle? Probably not. But Covid money is running out.

The Future

Despite these developments, significant hurdles remain. Opposition from brick-and-mortar casino operators and conservative lawmakers continues to stall progress in many states. Critics warn of social costs, including addiction and financial hardship, and argue that online gambling could harm traditional casino revenues. These concerns are amplified by high-profile opponents like The Cordish Companies, whose influence has swayed debates in multiple states.

As 2025 begins, the gambling industry finds itself in a familiar position: full of potential, yet constrained by political, social, and economic challenges. While this year may not be a transformative one for online gambling, it could set the stage for future expansions. With federal pandemic aid dwindling and state budgets tightening, the financial incentives for iGaming could become harder for lawmakers to ignore. For now, the industry’s path forward remains uncertain, but the groundwork for change is steadily being laid.