Pennsylvania, Michigan, California, New York, and Massachusetts.

That’s the shortlist of states people are keeping an eye on when it comes to online gambling legalization in the United States.

These are certainly good states to focus on, but there are also a handful of states that could be next year’s Michigan. That is, a state that comes out of nowhere and quickly becomes serious contender for online gambling legalization.

What makes a state a good candidate for online gaming?

Before discussing some of the other candidates that might emerge in 2017, here’s a look at what makes a state a good candidate for online gaming legalization.

Based on what’s transpired in the states that have already legalized and the states where legalization efforts are afoot, there are three key factors.

They are:

1. An existing land-based casino industry.
2. A reason for the legislature to consider a bill.
3. A lack of complicated obstacles.

Existing casino industry

An existing land based casino industry is close to a must, as these are the entities that will act as the operator.
Having an existing casino industry is the starting point, but to really be considered a good candidate for online gaming legalization it helps if casino revenue is declining in the state and/or the state’s casinos are pro-online-gambling.

It also helps if there is a consensus, or near consensus among the land-based operators when it comes to the model and specific policies they’re in favor of. Basically, the opposite of the situation in California, where you have disparate groups all fighting for their own self-serving version of an online poker bill.

Legislative reason

Where there’s a will, there also needs to be a way, and if you want state legislatures to explore online gaming legalization, you need to sell it to them as something that will be good for the state.

This shouldn’t too difficult. Most states are looking for new revenue streams, and lawmakers can take cover under the “we’re not expanding gambling, we’re simply regulating an existing industry” consumer protection argument.
In some of the more socially conservative states this won’t fly, but by and large, online gambling isn’t all that controversial in 2016.

Lack of obstacles

There are any number of things that can derail a state’s efforts to legalize online gambling before it even gets started, such as a state with a RAWA supporting governor, as the legislature will find it difficult to overcome a veto.

A state’s gambling statutes could also make it difficult if not impossible to legalize online gambling.

A good example of this occurred in New York, where the legislature could legalize online poker, but would need to pass a constitutional amendment to legalize online casino games – which is why the 2016 New York online gaming bill was poker-only, and why the state was careful to call DFS a game of skill.

What other states should you be watching?

In addition to the states mentioned at the beginning of this article, I’ve identified five other states that could jump into the online gaming conversation in 2017.

They are:

1. Indiana
2. Connecticut
3. Illinois
4. Maryland
5. West Virginia

Let’s look at each of these states in turn.

Indiana

Indiana has the legislative will for online gambling, as the state’s existing land-based casinos have been on the decline, and the state legislature trying to find ways to prop it up.

But the state has also long had a major obstacle in place that has stopped any talk of online gambling, as Governor Mike Pence is a supporter of a nationwide online gambling ban. This obstacle will disappear in January. Pence is running for vice president on the Republican ticket, which precludes him from running for reelection in Indiana.

With Pence gone I wouldn’t be surprised to see Indiana introduce a bill to legalize online gambling.

Connecticut

Connecticut possesses all three key factors listed above.

The state has an existing land-based casino industry that is on the decline. The decline is largely due to new competition from neighboring states, which has led to declining slot revenue flowing into the state’s coffers, giving the legislature the will to perhaps pass an online gambling bill.

Connecticut also lacks obstacles. Two tribes make up the state’s entire land-based gaming industry, and while they’re direct competitors, they’ve also started working together to bolster the industry as a whole.

As Foxwoods Director of Administration for Interactive Gaming Frank Pracukowski said at the 2015 C5 Online Gaming Conference in New York City, the state has told the tribes, “When you’re ready [for online gaming] you come to us.”
the question is, are the Connecticut tribes ready?

Illinois

Illinois has everything you’d want in an online gaming candidate, and because the state already offers legal online lottery sales, it also has the best chance to get an online gambling bill passed fairly quickly.

The state has explored online gambling in the past, albeit in a very preliminary way, but with Michigan taking a serious look at iGaming this year, 2017 might be the year Illinois revisits the topic.

Maryland

Maryland has everything you want on paper, but thus far there hasn’t been much of an appetite to tackle online gambling in the Old Line State.

Other than some general comments by former Maryland State Lottery and Gaming Control Agency Director Stephen Martino that were made at a 2014 forum in Massachusetts, there hasn’t been much online gambling talk from officials in Maryland. There have likely been some behind the scenes talks, but to date, there hasn’t been a public push for online gambling.

Still, if its neighbors start expanding into online gaming, Maryland will likely be forced to take a good hard look at iGaming, likely at the behest of its casino operators.

West Virginia

You meant to write Virginia right?

No, when it comes to online gambling I’m looking at West Virginia.

The state’s casino industry could certainly use the assistance, and back in 2014 the state lottery director, John Musgrave was already signaling the state was looking online for new gaming revenues that could be used to help offset the declining revenues at West Virginia’s four racinos. With even more competition popping up in the region, West Virginia may revisit online lottery and online gaming.

Anywhere else?

Washington State, Iowa, and Mississippi have all flirted with the idea of legalizing online gaming in the past, but so far these efforts have been modest at best.

Ohio and Rhode Island seem like good candidates, but I don’t see much happening in wither locale until more of their neighbors legalize online gaming.

Oregon and Florida look like good candidates on paper, but to this point Oregon has been almost completely silent on the topic, and Florida has to overcome Governor Rick Scott’s likely veto – Scott has supported a federal online gambling ban.