As the online gambling landscape changes fast, state lawmakers are stepping up with a plan. With internet wagering booming, lawmakers from states where gambling is already legal are rolling out a model bill for others to address the changing landscape. At the heart of their proposal? A 15-25% tax rate, no credit card deposits and consistent oversight.
The National Council of Legislators from Gaming States released this framework last week to help states still considering legalizing online gambling. Their goal is to find a balance: a clear path forward while respecting state's rights. And with seven states, including Michigan and New Jersey, already cashing in on online casinos, the momentum is hard to ignore. With promotions like free spins no deposit Michigan players are finding these welcome bonuses hard to resist, resulting in a growing base of players there and envious looks directed from further afield.
Internet Gambling Blueprint
This is not a new idea. This proposal builds on existing models, especially New Jersey's. As one of the first states to regulate internet gambling in 2013, New Jersey has become the benchmark. David Rebuck, the former head of New Jersey's Division of Gaming Enforcement, was an advisor to the group and called the proposal "95%" of what's already in place in his state.
The proposal includes several provisions to protect the consumer while ensuring fair play. A government agency to regulate online gambling would be required if not already in place. Daily deposits would be capped at $20,000 and credit card funding would be prohibited for accounts to prevent impulsive or irresponsible betting.
Taxation is key to the proposal. Fluharty, the council's president and a West Virginia state delegate, said the tax rate is competitive. 15-25% is low enough not to be a barrier to entry but high enough to generate revenue. Pennsylvania's rates are 36% for online sports betting and 54% for online slots. Many view these staggeringly high rates as a cautionary tale, one which doesn't necessarily need to be repeated.
Online Gambling Revenue
The money is real. In New Jersey alone, 15% tax on online casinos brought in over $414 million last year. As budgets get tighter across the country, states are looking at online gambling as the answer.
This isn't just hype. Rebuck says more states will take action in the coming year as the early adopters show success. Maryland and Louisiana have had their own bills but haven't passed yet. New York has allowed online sports betting but can't get online casinos going due to the 31.5% tax rate debate.
Takeaways from the Pioneers
The framework's focus on moderation is a lesson from states like West Virginia where the tax rate is 15%. Fluharty says to avoid "barriers to entry" so a wide range of operators—not just the big guys—can participate.
Also, states looking to legalize should focus on consumer protection. That means clear regulation of internet traffic, enhanced fraud detection and mechanisms to prevent problem gambling. With nearly a million students in Indonesia reported to be online gambling, the risks of unregulated internet betting are real globally.
Why Local Control is Key
One thing missing from the council's proposal is any national standards. Gambling is a state regulated industry and efforts to impose federal oversight have failed every time. Even during Donald Trump's presidency—a guy who was all about the gambling industry—national regulations were never seriously considered.
For many, that's a good thing. It allows states to make their own laws fit their own culture and priorities. In Utah all forms of gambling are banned while in Nevada they embrace their reputation as a gambler's paradise.
What's Next
As the internet gambling conversation heats up one thing is for sure: states are starting to talk to each other. The council's model legislation is a big step in that direction even if it's not all the way there.
For now, it's about giving states the information to make informed decisions and learn from the successes and failures of others. Whether it's Michigan's slow and steady approach or Pennsylvania's high risk high reward, the early adopters will shape the next wave of legalization.
With budgets tightening and demand increasing, the question is no longer if more states will legalize online gambling but how. And as lawmakers weigh the options, a clearer picture of a smoother more standardized system is emerging – one that's carefully designed to be fair and profitable.
The framework could be viewed as an invitation to talk not a directive. By providing a starting point it hopes to make legalization less scary for the holdouts. And no one blueprint will fit all but sharing ideas is a big step forward for online gambling.
For a country in the digital age of wagering, these conversations will mean a future where innovation and regulation can coexist, each supporting the other to create a fairer and more profitable industry.