The online gambling industry in the United States has experienced explosive growth in recent years, driven by technological advancements, shifting consumer preferences, and a patchwork of state-level regulatory changes.
Online gambling—encompassing sports betting, casino games, and poker—continues to evolve, contributing significantly to state economies while raising questions about sustainability and social impact.
This article provides an economic analysis of online gambling across U.S. states for the 2024–2025 period, exploring revenue generation, tax contributions, job creation, and the critical role of responsible gambling initiatives.
Drawing on official U.S. government data and industry trends, we’ll examine how this burgeoning sector shapes local economies and what lies ahead.
The Rise of Online Gambling: A National Overview
Online gambling has transformed from a niche activity into a mainstream economic force in the U.S.
The legalization of sports betting following the 2018 Supreme Court decision to strike down the Professional and Amateur Sports Protection Act (PASPA) opened the floodgates, with states rapidly adopting frameworks for online sportsbooks and, in some cases, iGaming (online casino games and poker).
By 2024, 38 states and Washington, D.C., had legalized sports betting, with 30 offering online options, according to the American Gaming Association (AGA). Meanwhile, seven states had fully legalized online casino gaming by the end of 2023, with Rhode Island joining the list in March 2024.
The economic impact is staggering. The AGA reports that U.S. commercial gaming revenue—including both land-based and online sectors—reached $66.65 billion in 2023, with online gambling contributing $21.54 billion, or roughly 30% of the total.
For 2024, projections suggest online gambling revenue alone will hit $24.98 billion, with a compound annual growth rate (CAGR) of 8.86% expected through 2029, pushing the market to $35.21 billion, per Statista Market Insights. This growth is fueled by mobile betting apps, which accounted for over 95% of sports wagers in 2024, and the increasing penetration of smartphones and high-speed internet.
State-by-State Economic Contributions
The economic benefits of online gambling vary widely by state, depending on legalization status, tax rates, and market maturity. Below, we analyze key states based on available data and projections for 2024–2025.
New Jersey: The iGaming Powerhouse
New Jersey remains a leader in online gambling, having legalized both sports betting and iGaming in 2018 and 2013, respectively. In 2023, the state’s online gambling revenue reached $1.92 billion, with iGaming alone generating $1.66 billion, according to the New Jersey Division of Gaming Enforcement.
For 2024, estimates suggest total online revenue will exceed $2.1 billion, driven by a robust market of over 30 licensed operators.
The state imposes a 15% tax on sports betting and a 13% tax on iGaming, contributing approximately $280 million to state coffers in 2023. This revenue supports public education and programs for seniors, showcasing a direct economic benefit.
Pennsylvania: A Balanced Market
Pennsylvania, with both online sports betting and iGaming legalized since 2017, reported $2.04 billion in online gambling revenue in 2023, per the Pennsylvania Gaming Control Board.
The state’s high tax rates—36% on sports betting and 54% on online slots—generated $735 million in tax revenue, funding infrastructure and public services. Projections for 2024–2025 indicate revenue could climb to $2.5 billion, bolstered by a growing user base and new operator entries.
Nevada: Sports Betting Growth Amid iGaming Absence
Nevada, the traditional gambling capital, has embraced online sports betting but not iGaming, limiting its online potential. In 2023, the Nevada Gaming Control Board recorded $15.5 billion in total gaming revenue, with online sports betting contributing $480 million.
For 2024, this figure is expected to rise to $550 million, reflecting a 14% increase. However, the lack of online casino gaming caps Nevada’s growth compared to states like New Jersey and Pennsylvania.
New York: Sports Betting Dominance
New York legalized online sports betting in 2022 and quickly became a market leader. In 2023, the state’s sports betting handle reached $19.6 billion, generating $1.64 billion in revenue and $837 million in taxes at a 51% rate, per the New York State Gaming Commission.
Forecasts for 2024–2025 suggest revenue could hit $2 billion, with tax contributions nearing $1 billion annually, supporting education and youth sports programs.
Emerging Markets: Ohio and Maryland
Ohio and Maryland, both of which legalized online sports betting in 2023, are emerging players. Ohio’s 2023 revenue hit $936 million, with a 10% tax rate yielding $93.6 million, according to the Ohio Casino Control Commission.
Maryland generated $558 million in revenue, contributing $83.7 million in taxes at 15%. Both states are projected to see 20–25% growth in 2024–2025 as markets mature.
Economic Impacts Beyond Revenue
Online gambling’s economic influence extends beyond direct revenue and taxes, affecting job creation, tourism, and local business ecosystems.
- Job Creation: The AGA estimates the gambling industry supports 1.8 million jobs nationwide, with online gambling adding roles in tech, customer service, and compliance. In New Jersey, for instance, the online sector employs over 5,000 people directly and indirectly.
- Tourism Boost: States with robust online markets often see increased tourism to physical casinos, as online platforms serve as marketing tools. Pennsylvania’s casino visits rose 8% in 2023, partly attributed to online brand recognition.
- Local Economies: Tax revenues fund public projects, reducing budget deficits. In New York, online gambling taxes have offset declines in traditional lottery revenue, stabilizing state finances.
Responsible Gambling: Balancing Growth and Social Good
As online gambling expands, so do concerns about problem gambling, necessitating robust responsible gambling measures. The economic benefits must be weighed against social costs, including addiction and financial hardship.
Prevalence and Costs
The National Council on Problem Gambling (NCPG) estimates that 2.5 million U.S. adults meet criteria for severe gambling problems, with another 5–8 million at risk. A 2024 Fairleigh Dickinson University poll found 68% of online sports bettors and 81% of online slot players exhibited at least one sign of problem gambling.
The social cost per severe gambling addict is estimated at $30,000 annually, per a 2023 study by the University of Nevada, covering healthcare, lost productivity, and legal expenses.
State Initiatives
States have implemented responsible gambling programs, often funded by gambling taxes:
- New Jersey: The Division of Gaming Enforcement mandates operators offer self-exclusion tools and allocates $2 million annually to the Council on Compulsive Gambling of New Jersey.
- Pennsylvania: The state’s Gaming Control Board requires operators to integrate advanced monitoring systems, with $5 million from 2023 taxes supporting treatment programs.
- Nevada: While lacking iGaming, Nevada’s Responsible Gambling Campaign promotes awareness, funded by a $1 million state grant in 2024.
Economic Trade-Offs
Responsible gambling measures can reduce revenue by limiting high-risk players, yet they enhance long-term sustainability. A 2024 AGA report notes that states with strong programs see 10–15% lower addiction rates, preserving consumer trust and market stability.
For 2025, states like Ohio plan to invest $10 million in prevention, reflecting a growing recognition of this balance.
Challenges and Future Outlook
Despite its economic promise, online gambling faces hurdles:
- Regulatory Fragmentation: The state-by-state approach creates inconsistencies, deterring operators and complicating compliance. California and Texas, major untapped markets, remain stalled on legalization as of 2025.
- Market Saturation: Mature markets like New Jersey may see slowing growth, with a projected CAGR of 5% versus 15% in newer states like Ohio.
- Competition: Offshore illegal sites siphon revenue, costing states an estimated $3 billion annually, per a 2023 U.S. Treasury Department report.
Looking to 2025, the industry’s trajectory hinges on broader legalization and technological innovation.
Virtual reality gambling and cryptocurrency payments could drive a projected $40 billion market by 2029. States adopting progressive policies—balancing revenue with responsible gambling—will likely lead the pack.
Final Thoughts
The economic analysis of online gambling in the U.S. for 2024–2025 reveals a dynamic sector reshaping state economies.
From New Jersey’s iGaming dominance, generating over $2 billion annually, to New York’s sports betting surge, with a $19.6 billion handle in 2023, the financial benefits are clear: billions in revenue, substantial tax contributions, and thousands of jobs.
For instance, Pennsylvania’s high tax rates have funneled $735 million into public services, while Ohio’s emerging market added 2,000 jobs in its first year.
Yet, the rise of responsible gambling initiatives underscores a critical tension—maximizing economic gains while mitigating social harm, as problem gambling costs states millions in healthcare and lost productivity.
Official data from agencies like the AGA, state gaming boards, and the U.S. Treasury highlight both the promise and complexity of this industry.
As states navigate this landscape, the interplay of regulation, innovation—such as VR gambling—and responsibility will define online gambling’s economic legacy in the years ahead, potentially unlocking new markets like California if legalization efforts succeed.
