Online gambling efforts in the US could get a big boost in 2025 with a new draft from the National Council of Legislators from Gaming States (NCLGS). The council has submitted a draft model legislation that would provide a guide for states looking to legalize online gambling. Aiming at responsible gaming, tax revenues, and player protection, the proposed system aims to make what has historically been a politically, socially, and logistically difficult process easier.
Key Pillars of the Proposal
According to former Florida state senator Steve Geller, the proposed bill, which was introduced to Congress at the July annual meeting of the NCLGS, has seven guiding principles. They include revenue generation, responsible gaming, addressing cannibalization concerns, advertising guidelines, licensing requirements, age limits, and data sharing.
The draft proposes a gambling age limit of 21 for adults, a 15%–25% tax on gross gaming revenue, and state regulatory boards. Public participation for the draft is open until December 31, 2024, after which it will be edited and passed to legislators.
A Long Road to Legalization
Legalizing iGaming has been a long road in the US. Currently, there are only seven states — Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, Rhode Island, and West Virginia — that allow online gambling. Negotiations to expand this list fell through in 2024, with Maryland and Ohio advancing legislation, but not getting it. Sports betting, by contrast, is allowed in many more states and shows just how competitive iGaming has become politically and socially.
NCLGS Council President Shawn Fluharty acknowledged it’s hard to draft a single proposal because of the problem of coordinating legislators across different political and economic realities. Despite the obstacles, the council believes the template will allow states considering iGaming legislation to find a less confusing road ahead.
What the Proposal Includes
There are some interesting details in the model legislation:
Ban on Sweepstakes
Sweepstakes games are specifically outlawed by the draft — it defines them as games of chance with a dual-currency structure mimicking a casino. The move is intended to end unregulated, untaxed games but, according to industry insiders, the proposed penalties ($10,000 to $100,000) are not strong enough.
Limits on Operators and Wagers
The idea is that states could set maximum iGaming license amounts and establish a bidding system. It also grants regulators the authority to dictate maximum wager limits, an issue that has been contested in jurisdictions such as Massachusetts. These are steps to improve player safety but operators might object.
Funding Restrictions
It would prohibit credit cards as a funding source for user accounts, but prepaid cards and e-wallets would be acceptable alternatives. This is standard practice across multiple states, but it poses a technical challenge for operators with multi-state platforms.
Focus on Responsible Gambling
The draft stresses responsible gambling with deposit and bet caps, government-funded treatment programs, and AI detection of gambling addiction. Yet advocates have also objected to the fact that no dedicated funding has been set aside for such programs.
Advertising Guidelines
Other restrictions would prohibit ads to anyone under 21, and college campus promotions. However, the draft is not near to the kind of tougher bans on advertising already found in some states, like on celebrity endorsements.
A Template, Not a Solution
The draft provides a detailed guide, but its content is not exhaustive. In the case of gambling, for example, the proposal to use AI to track gaming activity could be problematic from an operator’s privacy standpoint. Second, in the absence of firm positions on issues such as application fees and tax revenue distribution, there may be room for disagreement at the legislative table.
The emphasis on reciprocity between states may lead to interstate online poker, but convincing everyone to agree on such a provision will be difficult. The model legislation's parts that become law will be decided based on politics and state nuances.
Going Forward: The Road to 2025 and Beyond
The NCLGS draft proposal comes as states grapple with budget transitions. Even the ex-Michigan state representative Brandt Iden, who argued strongly for iGaming, has said mass acceptance may take until 2026 when federal COVID relief money will run out. At that time, more states would be in the market to legalize iGaming, due to the need for new revenues.
Though legislators, regulators, and industry experts are discussing the draft, one thing is certain: it is not easy to write effective and comprehensive iGaming laws. The proposed model is just a framework, but what will be at stake is the extent to which states respond to its terms and apply them to their particular circumstances.
As for now, the aim is to get a dialogue going and improve the proposal. What happens with the NCLGS template is a matter of which actions lawmakers take, and what reaction it gets from the public in the coming months.
Sources: https://igamingbusiness.com/gaming/model-igaming-proposed-legislation-us/
https://nclgs.org/images/NCLGS_Model_Internet_Gaming_Act_-_November_26_2024.pdf
