The first sites with gambling launched in the late nineties, meaning the online gaming industry is now heading into its third decade. And despite the rapid growth of the internet, online gaming has moved at a relatively snails pace — at least in the United States — thanks in part to well-funded opponents who aggressively try to halt growth — and in some cases roll back advancements in regulation.

We hear a lot about online gaming in the news, but where is the status of regulation in the United States right now as a whole?

A Brief Background

The U.S. Department of Justice’s reversed over a decade in precedent when they declared that the 1961 Wire Act only applied to sports betting. This ultimately led to states stepping up efforts to regulate in their jurisdictions. Online poker first went live in the state of Nevada in April 2013. Later that same year, New Jersey jumped in the mix when the state began offering online poker and online casinos in November 2013. Online poker and casinos also went live in Delaware around that time. Other forms of online gambling that have received some acceptance include online horse wagering and the online lottery purchase.

Then of course there is fantasy sports and the popular niche, daily fantasy sports (it should be noted that some in the industry resist lumping in fantasy sports with gambling). But most industry observers agree there is a strong case for the legality of DFS. So much of the attention in recent years has been devoted to online poker and online casinos.

Online Poker

It’s hard to believe but its been about four years since three states decided to regulate online poker – Nevada, New Jersey and Delaware. While the New Jersey market got off to a hot start, most have been disappointed in the relative performance compared to online casinos. In Nevada, there is now only one online poker network remaining in the state — WSOP — after Ultimate Poker closed despite being first to the market.

In Delaware, the sub 1 million population meant that the amount of people in the state could not sustain a poker player base. Delaware ultimately became part of the first interstate player pool when they merged with Nevada’s WSOP, which enjoys a population nearly 3x larger and a status as a gambling destination.

Even though revenue has not met expectations in New Jersey yet, there is still healthy competition in the state. WSOP.com, bwin.party and Poker Stars — and each of the network skins — are all aggressively catering to poker players. To some extent, poker rooms seem to be using New Jersey as a possible springboard into other states if/when they regulate.

Given its skill-based nature, online poker tends to remain more appealing to legislatures although we are seeing more states lump poker and online casinos together.

As for the outlook of regulated online poker in the intermediate term, efforts are still ongoing but there has been a frustrating level of progress since 2013. This year started out with more optimism than the past couple years, especially in Pennsylvannia. But despite the strong efforts to regulate, it still is a coin flip to happen this year. Some worries that high taxes could hinder the market even if were to pass.

Other states such as California, New York and Illinois have also tried to regulate this year, but have thus far fallen short, in what feels like is becoming an annual tradition (especially in the case of California). Beyond these states, we haven’t seen a huge move towards regulation, possibly due to relatively weak revenue numbers out of New Jersey and strong anti-gambling lobby efforts elsewhere.

The Sheldon Adelson-backed Restoration of America’s Wire Act (RAWA) would attempt to roll back the previous interpretation of the Wire Act, which for many years was cited as the basis for opinions of a “ban” on online gambling. If RAWA were to be passed, it would not only be devastating the future of gambling in the United States but also in states where it has been successfully regulated. Fortunately for the industry, a ban on online poker and casinos isn’t as politically feasible as it was 10 years ago and would face serious hurdles. Although caution remains, efforts to regulate online poker on a federal level seems to have all but died as the issue is being left to states.

Online Casinos

Online casinos have only regulated in Delaware and New Jersey so far — with the latter demonstrating huge success and is serving as an example of potential revenue (and tax dollars) that could await other states that jump on board. New Jersey has generated over $500 million in revenue to date and over $100 million in tax revenue for the state, easing some of the burden created by Atlantic City’s downturn over the last decade.

The future of online casinos seems to fall in line with online poker. Online casinos haven’t traditionally been as palatable as online poker, but the revenue numbers out of New Jersey sure present an interesting case for regulating the games (that many will still play anyway) while bringing in some much needed tax dollars.

Daily Fantasy Sports

It’s been a wild ride for DFS. First, DFS was one of the few bright spots to come from the UIGEA, which effectively paved the way for the contests. But after 8 years and exponential growth, the industry hit a major snap. In the wake of a data leak scandal at Draft Kings, many states began to take a closer look at the game that had been dominating the marketing during sporting events.

Unlike online poker and casinos, however, no action has been taken federally. The issue is being resolved on a state by state basis. Some states are fine letting DFS operate as is, where other states have required that DFS be specifically mentioned in state gambling regulations. Some of these states have went through with regulation while some others have chosen to restrict the games – at least for now.

At least 14 states have expressly regulated daily fantasy sports over the last couple years including Colorado, Indiana, Massachusetts and New York. It’s a fast-growing growing list and an encouraging sign for proponents of any kind of online gaming regulation in the U.S. Daily fantasy sports have effectively been given a carve-outs in the UIGEA and given its widespread acceptance, is the most popular form of “online gaming” in the United States right now.

Daily fantasy sports biggest threat may be comparisons to sports betting and whether the vertical can generate the kinds of interest for a sustainable business model and competition, especially if sports betting were to be regulated.

Online Sportsbetting

Most surprising development over the last couple years — to some — has been the calls for expanded sports betting in the country. In fact, the Supreme Court is currently reviewing a case that could pave the way for sports betting being regulated elsewhere. There are a lot of business interests being the scenes that reportedly want it to happen, citing increased engagement from fans and the fact that is underground sportsbetting is everywhere already. Even though sportsbetting regulation will likely happen at brick and mortar books first, DFS could help pave the way for an expansion of sports-related gaming that could conceivably turn into something that looks like the online sports betting that you see in Europe.

Traditionally opponents of sports betting, sports leagues are slowing warming to the expansion of sports betting in the United States. This combined with a favorable Supreme Court decision this fall could finally turn the tide.

Lotteries and Other Forms of Online Gambling

The efforts to restrict casino-type gambling in the U.S. has led to some interesting carve-outs and exceptions for other verticals.

The UIGEA unintentionally paved the way for daily fantasy but also expressly carved-out online betting on horses, as long as it is not illegal in the state. And in some states such as Illinois and Georgia you can actually purchase lottery tickets online, provided you are present in the state.

Skill-games can also be played for money, but the debate on what constitutes a game of skill is constantly scrutinized. Poker and sports betting are rooted in some hybrid for form of skill and random chance, but thus far as not had much luck with the “skill-based” argument.