As one of the newest gambling markets in the world, the US has become a magnet for operators from Europe, Asia and Latin America. While online gambling in the US is still somewhat of a fledgling industry, it has benefitted from the support of companies from more established jurisdictions.

What's good news for the gambling industry is also good news sports betting and casino fans. There are now more ways than ever to wager and gamble in the US, and developing technological innovations such as NFTs, blockchain and the metaverse mean that it is a more exciting time than ever to try out the best US online casinos.

US Market Predicted to Grow

In 2020, the US online gambling market was estimated to be worth 2,178.29 million. That value has been projected to rise by a compound annual growth rate of 17.34% during the forecast period 2021 to 2026. In recent years, the COVID-19 pandemic has caused a market shift, from offline to online gambling.

Responding to restrictions on physical trading, a number of sportsbooks and casinos took to the opportunity to expand their digital offerings. Online gambling is also set to increase as a growing number of states introduce their own regulations.

At present, not all US states allow betting or games of chance to take place online. In 2011, the Department of Justice issued a legal opinion that changed how federal governments can interpret the Wire Act of 1961. They decided that the act only applies to sports betting, not other forms of gambling.

This decision has made it possible for individual states to pass their own legislation and launch regulated online gambling. Only a small number of states have so far taken the opportunity to allow online casino and poker products, although that number is expected to rise as sports betting continues to grow in popularity.

Progress has been hampered by the Department of Justice's 2019 decision to reverse its 2011 interpretation of the Wire Act. The DOJ now states that it applies to all forms of gambling. Currently, online casino games and poker are legal in Connecticut, Delaware, Michigan, Nevada, New Jersey, West Virginia and Pennsylvania.

For US casinos that are in states that allow online gambling, launching new services has been far from a straightforward process. Online casinos have offered bricks-and-mortar casinos with a valuable opportunity to diversify their offerings, but it has meant starting from scratch when it comes to creating online platforms and offering online slots and table games.

US operators are therefore reliant on the expertise of European brands that already boast extensive portfolios of games and established software and platforms. For the US market, this has meant partnerships and acquisitions, all of which take time to fully lay out.

Sports betting is on the other hand far more widespread. After it was legalized 2018, 33 states have passed legislation to allow their citizens to place sports wagers. That number is set to rise further, as the financial success of the sports betting market becomes increasingly evident.

Worldwide Growth

The global online gambling market is also expected to grow, although it faces a slightly different set of challenges to the US market. In 2021, the online gambling market was estimated to be worth around USD 61.5 billion worldwide. By 2028, the industry's revenue is expected to grow to a staggering USD 114.4 billion, with an estimated compound annual growth rate of 10.9 percent over the forecast period.

The impact of COVID-19 has cast doubt on future projections, although the market remains optimistic. Revenues at land-based casinos and sportsbooks were affected as they were forced to close their doors to the public, causing a strain on operators and their staff.

However, restrictions on offline gambling only served to drive growth in the online market faster than had previously been predicted. Web-based operators saw a rise in demand as work-from-home orders pushed people online and cut off other leisure activities.

Demand for digital gambling is rising steadily, thanks to radical innovations in technology, the increased use of smartphones and increased spending power. To compete in the lucrative market, operators have prioritized their spend on apps and software that maximize user experience.

Emerging technologies such as blockchain, AI and virtual reality have made online casinos more exciting than ever for customers. The adoption of this technology within sports has also supported an increased interest in wagering.

The rise of online payment services has helped to fuel the growth of the online gambling industry. As digital and mobile payments have become simpler and more secure, their adoption amongst online gamblers has increased.

While online casinos are catering to rising demand, it is sports betting that is expected to be the main driver of growth over the next six years. Sponsorships of teams from gambling firms are likely to increase, further supporting interest in the sector. A number of game-changing acquisitions and agreements in recent years show how the industry is changing.

In 2021, daily fantasy and sports betting company DraftKings agreed to acquire Golden Nugget Online as part of an all-stock deal. As well as the Vegas casinos popular brand, DraftKings will gain a wealth of online gaming experience and an audience of more than 5 million customers.

In the same year, leading operator Flutter Entertainment and Playtech agreed to continue their partnership for another five years. Flutter brands including Sky Casino, Betfair and Paddy Power will benefit from the software developer's cutting-edge technology.

Stricter Regulations

In the UK, operators are bracing themselves for tougher regulation. The government is expected to publish a white paper outlining new rules for the sector, following a wide-ranging review of its gambling laws. It has been largely accepted that the 2005 Gambling Act is no longer fit for purpose, as it predates the rise of online gambling.

Stricter gambling laws are a trend that has become increasingly visible across Europe. Law-makers are keen to reign in the industry to avoid harms to citizens, as increased uptake of online gambling led to rises in addiction and mental health issues.

In 2008, Germany opted to take a tough stance, banning all forms of online gambling. By 2010, the European Court of Justice ruled that this legislation violated EU rules and order the country to relax its laws. In 2009, France drafted more liberal laws to regulate and tax internet gambling, offering license to 25,000 websites in place of banning them.

While approaches to regulation vary across Europe, it is clear that only gambling is still a viable market. The European Gaming and Betting Association projects gross gaming revenue in the EU will rise to €29.3 billion in 2022. The increasingly hostile climate has however caused some operators to take their business elsewhere.

Since PASPA was overturned in 2018, legalizing US sports betting, European operators have eyed up the market as a potential goldmine. William Hill, one of the UK's oldest sportsbooks, was one of the first to recognize the potential of the emerging US market. Having offered its services in Nevada since 2012, where wagering was already legal, the bookmaker was well prepared to enter New Jersey in 2018.

As sports betting swept across North America, William Hill has fairly consistently been first on the scene. This success did not go unnoticed, and in 2021 casino operator Caesars Entertainment paid $3.7 billion to purchase the sportsbook. It has since offloaded William Hill's European business to 888 Holdings for $3 billion.

While William Hill was able to cash in on the US market and shed its struggling UK business, the agreement has also proved beneficial for Caesars Entertainment. It needed the sportsbook's 88 years of experience to establish an advantage in what is proving to be a competitive market.

The practice of buying out established UK sportsbooks is one that has been repeated by a number of other US casino giants looking to diversify their assets. It is a pattern that we can expect to continue, especially as legal restrictions in Europe grow ever tighter and the US online gambling market continues to expand.