TLDR
- The National Council of Legislators from Gaming States (NCLGS) is developing model legislation for legal online gambling
- The draft legislation aims to cover areas including tax rates, responsible gaming, and licensing
- NCLGS plans to release a draft for public comment by August 1, with final approval expected in December
- Only seven US states currently have legal iGaming, despite its potential for higher revenue than sports betting
- Experts discuss concerns such as cannibalization of brick-and-mortar casinos and anti-money laundering measures
The National Council of Legislators from Gaming States (NCLGS) is crafting model legislation to provide a framework for states considering iGaming legalization. This initiative aims to equip lawmakers across the country with a comprehensive template for introducing online gambling bills in 2025 and beyond.
The project, which has been in development for months, was discussed in detail at the recent NCLGS meeting in Pittsburgh. Former Florida State Senator Steve Geller, who is leading the effort, outlined the key components of the proposed legislation. The current draft suggests a tax rate range of 15-25%, aligning with the average 19% rate in the seven states where iGaming is already legal.
Beyond taxation, the model legislation aims to address seven crucial areas: revenue generation, responsible gaming, potential cannibalization of brick-and-mortar casinos, advertising guidelines, licensing procedures, age limits, and data sharing. NCLGS President Shawn Fluharty emphasized the goal of creating a foundation that could work in most states, recognizing the diverse landscape of gambling laws across the country.
The timeline for this initiative is ambitious. NCLGS plans to release a draft of the legislation to its membership by August 1, followed by a 30-day public comment period. The organization will then consider the feedback, make necessary revisions, and present a final version at their December meeting in New Orleans.
This push for model iGaming legislation comes as many states face budget shortfalls and seek new revenue sources.
Online gambling has proven to be a significant revenue generator in states where it’s legal, often outperforming sports betting. However, despite nearly 40 states legalizing some form of sports betting since 2018, only seven currently offer legal online casino gaming.
The disparity in adoption rates between sports betting and iGaming was a topic of discussion among experts at the NCLGS meeting. Lee Copella, iGaming compliance director at the Pennsylvania Gaming Control Board, noted that online casino gaming attracts a different audience and provides more consistent revenue compared to the fluctuations seen in sports betting.
One of the primary concerns addressed in the discussions was the potential cannibalization of brick-and-mortar casinos by online gambling. However, regulators from states with legal iGaming, including New Jersey, Delaware, and Pennsylvania, reported that they had not observed significant cannibalization.
In fact, Pennsylvania’s land-based casino revenue has remained steady while adding $1.9 billion in online casino revenue in the most recent fiscal year.
Anti-money laundering (AML) measures were also highlighted as a critical component of any iGaming legislation.
Howard Glaser, director of government affairs at Light and Wonder, emphasized the importance of equipping regulators with the right tools to combat potential money laundering through online gambling platforms.
The model legislation is expected to be between 15 and 20 pages long, focusing on key policy areas while leaving room for individual states to adapt the framework to their specific needs. NCLGS also plans to provide separate guidelines for regulators to implement the law effectively.
As states consider expanding into online gambling, education and public awareness will be crucial. Maryland State Senator Ronald Watson, who led an unsuccessful attempt to legalize iGaming in his state this year, stressed the importance of treating the legislative process like a campaign, involving a team of supporters and educating both lawmakers and the public.
