Not every website calling itself a “casino” is operating legally. In the United States, real-money online casino gaming is only permitted in states that have passed specific legislation — and every operator in those states must go through a rigorous licensing process before a single dollar can be wagered.
This guide explains exactly how US online casinos get licensed, what regulators look for, and why this process matters for every player who participates in regulated gaming. For a broader view of the market these licenses operate in, see our US iGaming Market Size 2026 guide.
Why Licensing Matters: The Foundation of Consumer Protection
A gambling license isn’t just a permit to operate — it’s a guarantee to players that the platform has been independently verified for:
- Financial stability — the operator can pay player winnings
- Game fairness — random number generators (RNGs) are independently tested
- Data security — encryption technology protects personal and financial information
- Responsible gaming compliance — tools like self-exclusion and deposit limits are in place
- Anti-money laundering (AML) — Know Your Customer (KYC) procedures are enforced
When you play at a licensed US online casino, you have legal recourse if something goes wrong. The same is not true of offshore or unlicensed platforms. According to the American Gaming Association (AGA), the licensed US gaming industry contributes over $328 billion in annual economic impact and supports robust consumer protection frameworks. Learn more about the responsible gaming tools all licensed US operators must provide.
How Online Casinos Get Licensed in the US: The Regulatory Framework
Unlike countries with a single national regulator (such as the UK Gambling Commission), the United States operates on a state-by-state model. Each state that has legalized iGaming maintains its own regulatory body responsible for issuing licenses and enforcing compliance.
As of 2026, seven states have active, licensed online casino markets. For a complete list of which states allow online casino gaming, see our state-by-state guide.
| State | Regulator | Year Launched | Notable Licensees |
|---|---|---|---|
| New Jersey | Division of Gaming Enforcement (DGE) | 2013 | BetMGM, Golden Nugget, Caesars |
| Delaware | Delaware Lottery | 2013 | State Lottery operators |
| Pennsylvania | Pennsylvania Gaming Control Board (PGCB) | 2019 | DraftKings, FanDuel, Hollywood Casino |
| Michigan | Michigan Gaming Control Board (MGCB) | 2021 | DraftKings, FanDuel, BetMGM, PointsBet |
| West Virginia | WV Lottery / Racing Commission | 2021 | DraftKings, FanDuel, BetMGM |
| Connecticut | CT Department of Consumer Protection | 2021 | DraftKings (Mohegan Sun), FanDuel (Foxwoods) |
| Rhode Island | RI Division of Lotteries | 2023/2024 | Bally’s (exclusive) |
Maine has passed iGaming legislation but has not yet launched its market as of 2026.
The Licensing Process: Step by Step
While exact requirements vary by state, the US online casino licensing process typically follows these stages:
Step 1: Eligibility & Pre-Application
The applicant — usually a company already holding (or partnered with) a land-based casino license — must determine whether they meet the basic threshold requirements:
- No criminal history for key personnel
- Proof of sufficient capitalization to cover player liabilities
- Existing relationship with a licensed land-based casino (required in most states under the “tethered model”)
Step 2: Background Investigations
State gaming commissions conduct exhaustive background checks on all principals, officers, and major shareholders. Investigators examine:
- Corporate structure and ownership chain
- Financial history and source of funds
- Any prior regulatory actions in other jurisdictions
- Personal histories of executives and board members
This process can take 6 to 18 months in states like Pennsylvania and New Jersey, where the regulatory process is particularly thorough.
Step 3: Technical Certification
All games must be tested by an independent testing laboratory (ITL) — such as GLI (Gaming Laboratories International) or BMM Testlabs — to certify:
- Random Number Generator (RNG) fairness and unpredictability
- Published Return-to-Player (RTP) percentages are accurate
- Geolocation systems work correctly (players must be within state borders)
- Age verification systems block underage players
- Encryption standards meet state security requirements
Step 4: Responsible Gaming Compliance
Every state requires licensed operators to implement a full suite of responsible gaming tools before launch. The American Gaming Association reports that all 38 jurisdictions with legal gambling mandate:
- Self-exclusion programs (both state-level and operator-level)
- Deposit, wager, and time limit tools
- Problem gambling helpline disclosures (National Council on Problem Gambling)
- Employee training for identifying problem gambling behavior
Step 5: Application & Fee Payment
Operators submit a formal application with all supporting documentation and pay licensing fees. In New Jersey, for example:
- Online casino operators pay a 19.75–22.25% effective tax on gross gaming revenue
- Initial licensing and renewal fees apply on top of this
Pennsylvania charges a 36% tax on sports betting GGR and separate iGaming levies, while Michigan’s rate scales up to 28% for higher-revenue operators. For full revenue data by state, see our US iGaming Market Size 2026 analysis.
Step 6: Soft Launch & Ongoing Compliance
After approval, operators often conduct a limited “soft launch” before full public release. Once live, they are subject to:
- Regular audits by state gaming commission inspectors
- Monthly financial reporting requirements
- Ongoing technical reviews for new game additions
- Advertising compliance reviews (34 jurisdictions have specific ad restrictions)
The Tethered Model: Why You Need a Land-Based Partner
In most states, online casino licenses are “tethered” to existing brick-and-mortar casino licenses. This means a tech company like a software developer cannot simply apply for an online license independently — they must partner with a land-based casino that already holds a valid state license.
This model was designed to:
- Protect established land-based operators from being undercut by online-only competitors
- Ensure a known, regulated entity is accountable for the platform
- Leverage existing compliance infrastructure
Pennsylvania’s “tethered model” has created a unique hierarchy where a single land-based casino certificate can support multiple branded online platforms (called “skins”), leading to high market concentration at the top.
New Jersey: The Gold Standard for US iGaming Regulation
New Jersey, which launched its online casino market in November 2013, is widely regarded as the benchmark for US iGaming regulation. The Division of Gaming Enforcement (DGE) provides:
- Clear, well-established regulations that reduce legal uncertainty for operators
- Relatively efficient licensing processes compared to newer states
- A mature compliance ecosystem with experienced regulators
- Strong consumer protection infrastructure built over a decade of operation
Other states frequently reference the New Jersey framework when drafting their own iGaming legislation.
What About States Without iGaming Licenses?
The majority of US states — including California, Texas, Florida, New York, and more than 40 others — do not have licensed online casino markets as of 2026. In these states:
- Real-money online casino gaming is illegal for operators
- Players accessing offshore platforms do so without consumer protections
- Sports betting may be legal (in 38+ states) even where iGaming is not
The distinction between a licensed US operator and an offshore site is critical for player safety. Only licensed operators are held accountable by state law.
States to Watch in 2026
Several states are actively moving toward iGaming legalization:
- New York — Active legislation in 2026 session; could become the largest US iGaming market
- Virginia — Internet gaming bills advanced from committee in 2026 (subject to multi-year passage requirements)
- Massachusetts — Considered a strong candidate by industry observers
- Illinois — Proposals under active discussion but no progress in 2026 session
- Maryland — Multiple attempts since 2023; no bills have advanced far
How to Verify If a US Online Casino Is Licensed
Before depositing money at any online casino, verify their legitimacy:
- Check your state gaming commission’s website for the official list of licensed operators
- Look for the licensing information in the casino’s footer — licensed operators display their state license number
- Verify the operator’s name against official state registries:
- NJ: nj.gov/oag/ge
- PA: gamingcontrolboard.pa.gov
- MI: michigan.gov/mgcb
- If a site only shows offshore jurisdiction licensing (e.g., Curacao, Malta), it is not legally authorized to accept US players
Frequently Asked Questions
How long does it take to get an online casino license in the US?
The full licensing process typically takes 6 to 18 months in mature states like New Jersey and Pennsylvania, depending on the complexity of the operator’s corporate structure and the thoroughness of background investigations.
Can a foreign company get a US online casino license?
Yes, but only if they partner with a licensed US land-based casino under the “tethered model” that most states require. Some operators (like Bet365 and Entain/BetMGM) operate in the US through US-based subsidiaries with the proper partnerships in place.
How much does an online casino license cost?
Initial licensing fees vary by state — typically ranging from $250,000 to several million dollars — plus ongoing taxes on gross gaming revenue (between 15% and 36% depending on state). Pennsylvania charges some of the highest rates in the country.
What happens if an unlicensed operator targets US players?
Unlicensed offshore operators face cease-and-desist orders, federal investigations, and potential criminal charges under the Wire Act and UIGEA. Players using these platforms have no legal recourse if disputes arise.
Is sports betting licensing different from iGaming licensing?
Yes, though there is significant overlap. Sports betting is legal in 38+ states; iGaming (online casino) is only legal in 7. Operators typically must apply for separate licenses, even within the same state.
Key Takeaways
- Only 7 states have active licensed iGaming markets as of early 2026
- Licensed operators are vetted for financial stability, game fairness, and player protection
- The tethered model ties online licenses to land-based casinos in most states
- New Jersey is the benchmark for US iGaming regulation since 2013
- Always verify an operator holds a valid state license before depositing funds
- The US iGaming market is valued at $6.89 billion in 2026 across 7 licensed states
⚠️ Legal Disclaimer & Editorial Notice
Not Legal Advice. This article is published for informational and educational purposes only. Nothing on this page constitutes legal advice or a legal opinion of any kind. No attorney-client relationship is created by reading this content. Always consult a licensed attorney in your state before making decisions based on information found here.
Accuracy Notice. Gambling laws, licensing requirements, and regulations change frequently at both state and federal levels. While we make every effort to keep our content accurate and up to date, Regulated Gaming US cannot guarantee the completeness or current validity of any information published. Readers are solely responsible for verifying all information with the relevant state gaming commission or a qualified legal professional.
State Variation. Online gambling laws vary significantly by state. Information accurate for one jurisdiction may not apply to yours. Always check your state’s current legal status before participating in any form of online gambling.
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