Projecting which U.S. states will legalize online casinos next: New York, Massachusetts, Illinois

In 12 years, legal online casinos have gone from a novel industry to one that generates billions of dollars in tax revenue for the seven states that feature legal iGaming. That kind of growth has caught the eyes of lawmakers across the country, as more bills to legalize online casino games have cropped up over the past few years. The question seems to be a matter of "when" – not "if" – other states will launch online casinos. But which jurisdictions would likely be next?

The hill is steep to the finish line for any iGaming bill here, but New York's location makes it the state with the most eyes on it.

For over a decade, lawmakers in the Empire State have watched citizens travel across the Hudson River to gamble online legally in New Jersey, which reaped the benefits with over $1.3 billion in state tax revenue between 2018 and 2024. The same could be said for Pennsylvania, where legal online casinos have led to to more than $3.5 billion in tax revenue since 2019.

Sen. Joseph Addabbo Jr. has made legalizing online casinos a main focus in recent years – especially with New York facing a projected three-year budget deficit of $34.3 billion. Each effort, though, has fallen short.

While most recently the rationale went that state officials were focusing on issuing three downstate land-based casino licenses, the biggest hurdle is the New York Hotel and Gaming Trades Council (HTC), which represents thousands of gaming workers at land-based casinos. The HTC firmly believes legal online casinos would cannibalize commercial facilities, and the labor union has not eased from that stance. 

With downstate casino licensing expected to conclude by the end of 2025, there's little doubt that Addabbo will make another all-out push to legalize online casinos – not only because of the state's financial strains but also because of New Jersey and Pennsylvania continuing the thrive off the Empire State's absence of online casinos.

Like New York, Illinois has enjoyed the boom of legal sports betting in recent years, contributing to $2 billion annual tax revenue pocketed by the state.

Lawmakers continue to push for online gambling expansion in an effort to ride those coattails. And while 2025 saw a bill proposal never gain traction, Illinois Attorney General Kwame Raoul guaranteed that the state will legalize real money online casinos "at some point."

Speaking at a meeting of the National Council of Legislators from Gaming States, Raoul predicted that Illinois would include online casinos as part of its next expansion of legal gambling.

That said, Illinois sportsbooks recently saw a significant tax hike from state officials, reaching as high as 40% depending on annual revenue. So any iGaming bill with a perceived high tax rate could face plenty of pushback from stakeholders.

Another New England state with eyes on expansion, Massachusetts has seen several bills introduced in 2025 to legalize online casinos. The state's Joint Committee on Economic Development and Emerging Technologies expects to hold a hearing in November to discuss the matter.

Arguably, Massachusetts is the best bet to legalize online casinos, especially with lawmakers emphasizing that state residents are already engaging in illegal gambling and by authorizing state-run iGaming, the state could earn over $250 million in annual tax revenue.

Like any state looking to legalize online casinos, Massachusetts has its fair share of opponents, most of whom argue that going digital would cannibalize land-based casinos and threaten job losses and rising job rates.

Still, Massachusetts has been riding a wave of gaming expansion, legalizing sports betting in 2022 and expecting the launch of internet lottery in spring 2026. That kind of trend indicates state lawmakers' acceptance of further expansion and why Massachusetts could be next to legalize online casinos.

Grant Lucas