The US regulated online casino sector has grown rapidly in recent years, while offshore casinos continue to do brisk trade in unregulated states. While estimates vary the regulated market in seven states is worth somewhere north of $10 billion a year – and offshore casinos are reportedly worth even more. Which is not to mention the markets for sweepstakes casinos, and all the other forms of online gambling.
With all this money on the table, and more customers flooding in every day, entrepreneurs in the US and around the world are of course looking to get into the game. Although regulations and laws are fragmented and complex, it is one of the most potentially lucrative markets in the global gambling sector. This, is what aspiring gambling moguls need to know about launching an online casino in the United States.
Legal and Regulatory Requirements Apply to Licensed and Offshore Sites
Before you begin, you should consider the three broad categories of online casinos serving US customers. Regulated sites, sweepstakes casinos and offshore operators. To be based physically in the US, you need to have a regulated license from one of the states. So for the purposes of this article, offshore sites are out.
Not that these aren’t a viable business model in some cases. Offshore casinos serve grey area markets in states without any kind of online gambling regulation. Because they are based “offshore” the US federal law doesn’t apply – and states haven’t criminalized players, so these businesses continue to see regular play from US gamblers. But, if you want your business based in the USA, a sweepstakes casino or a regulated model is the option for you.
Sweepstakes casinos use a hybrid model of two digital currencies, to get around gambling laws by offering real money prizes without the player gambling actual cash. These are profitable and tolerated (for now) in many states, but have been banned in others – so it’s riskier.
If you choose the regulated route, you will need to get your business licensed in one of the seven states that offer regulated services. One of those – Rhode Island – has only one state-backed operator, so that is off the table (for a few years at least). That leaves:
- Connecticut
- Delaware
- Michigan
- New Jersey
- Pennsylvania
- West Virginia
Knowing and Planning Your Business Model is Vital
As with any business, a clear commercial model is needed before beginning. Online casinos have a huge potential customer base and can make a lot of money – but the process to get started is not cheap or simple. Licensing alone can cost hundreds of thousands in some states, while securing things like game providers, efficient customer support, tech stack and regulatory compliant security measures come with upfront costs.
Market research will be needed to ascertain where demand and competition meet and how your brand or take on the online casino idea might have a competitive advantage. Some states will require local partners, often tribes, casinos or sports organizations, so some commercial outreach will also be required.
If this all sounds like a lot of work, remember, online casinos in New Jersey, for example, make hundreds of millions of dollars a month as of 2026. The customers and market spend is there for a new innovative casino to tap into.
Sweepstakes casino models are far less costly to set up (less regulation, lesser known game providers) but again they are riskier as states could decide to crack down at any time. Even if the model does hold up in court, legal battles are costly so many sweepstakes casinos simply stop operations in those states when legally challenged.
A Simplified Step by Step Process to Launch
- Conduct market and legal research – identify which state(s) your casino will launch in
- Detailed business plan and budget, for your money or to attract investors
- Secure and allocated funding and any partnerships
- Set up your tech stack – build your own or use a white label provider
- Organize payment processing, which can be complicated for a new online gambling operation in the US
- Ensure regulatory compliance and obtain a license
- Fully marketed launch, potentially with loss-leading promotions to bring in initial custom
Those seven steps could take anywhere from one to three years, or more, depending on how in-depth you want your planning stage to be and how much of the tech stack you’re going to assemble in-house.
For a sweepstakes casino, the process is broadly similar except the tech stack is simpler, there is much less regulatory compliance needed and no licensing required.
Operational Considerations Will Continue
Once you’re online, putting your work out there and asking independent expert reviewers to look at your casino is advisable. Today’s players are highly informed and savvy enough to use comparison sites before choosing a casino. For example, Casino.us compares the best online casinos on multiple criteria – including payment speeds, game selections and bonuses – providing breakdowns players rely on. Operators who don’t hold themselves to a high standard, risk being flagged by reviewers – which can be difficult to recover from reputationally.
After launching, opening promotions will need tweaking to remain competitive but not as swingy. You will also need to begin accounting for tax purposes, and start dealing with customer questions and issues. Continued monitoring for responsible gambling, Know Your Customer and Anti Money Laundering rules is also vital.
Marketing takes up about 8% of the average company’s revenue in the US. One recent survey found that sports events viewers see more than one ad for gambling every minute on US broadcasts. It’s a competitive market, so all that’s left is to show everyone what your casino is about.
