The National Council of Legislators from Gaming States (NCLGS) has embarked on creating a standard framework for igaming legislation. This initiative began during their annual convention in July, led by former Florida state senator Steve Geller. The proposed model legislation aims to address seven core aspects: revenue generation, responsible gaming, the issue of cannibalization, advertising guidelines, licensing, age restrictions, and data sharing.
This legislation suggests that tax rates should remain between 15% and 25% of gross gaming revenue, with significant powers granted to regulators. These powers include determining application and renewal fees, typically set by legislative bodies in many states. The proposed draft is open for public commentary until December 31st, after which a NCLGS committee will refine it for legislative consideration.
### Challenges in Legalizing Igaming
No US state has legalized igaming in 2024. Although Maryland’s lawmakers engaged in discussions and held votes, they failed to advance the issue to the governor. In Ohio, an igaming bill was introduced in September, and several other states are contemplating similar actions. Currently, igaming is permitted in seven states: Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, Rhode Island, and West Virginia. Among the top ten states for legal sports betting, only Michigan, New Jersey, and Pennsylvania offer igaming.
The process of establishing a model igaming legislation by NCLGS has been arduous. Shawn Fluharty, the council president, had hoped it would be ready by early August. However, coordinating consensus among state lawmakers proved more challenging than anticipated.
### Potential for Regulatory Flexibility
Passing igaming legislation appears more complex than legalizing sports betting. Successful legalization depends heavily on the right educational, political, and economic circumstances. Brandt Iden, former Michigan state representative, noted that 2025 might not be ripe for such legislation due to sufficient state funding. However, 2026 could be significant as COVID-19 relief funds are depleted. Previous sports betting legalization attempts were prompted by the need for funds for pensions, education, and infrastructure projects.
The model legislation incorporates standards akin to those found in legal sports betting laws. These include setting the minimum gambling age at 21, advocating for responsible gambling funds, and establishing advertising guidelines. However, there’s potential for discrepancies in some states, like Kentucky, where the legal betting age is 18. The proposal notably doesn’t specify application fee ranges.
Moreover, lawmakers suggest the creation of specialized gambling regulators, as currently igaming and sports betting in some states are overseen by lotteries or racing commissions.
### Political Nuances
The proposal includes language supporting reciprocity between states, enabling interstate poker. It also expressly bans “internet cafes” offering unauthorized internet games. However, the political landscape is unpredictable, with state-specific quirks emerging during the legislative process. While the model is comprehensive, some areas remain ambiguous or flexible.
The proposal outlines key points and analyzes potential obstacles in implementation. Recent concerns about the growth of untaxed, unofficial games have prompted NCLGS to consider a full ban on sweepstakes, describing them as games with prizes awarded based on chance.
### Regulatory Limits
In Massachusetts, the debate over bet limits is ongoing, with operators cautious. Although no state currently enforces such limits, the model legislation permits regulatory bodies to set maximum wagers. This could face opposition from operators used to setting their limits.
Section 4 of the proposal suggests states should control the number of licenses and skins available, recommending a competitive bidding process. However, it limits possible licensing to existing operators, with no provisions for standalone digital casinos or new platforms.
### Financial Considerations
The model legislation discusses account funding and deposit restrictions, notably excluding credit cards, while allowing prepaid cards and digital wallets. There is a suggested deposit cap of $20,000 in 24 hours, although monitoring across multiple operators remains unclear.
### Responsible Gambling Practices
Standard responsible gambling measures are proposed, including exclusion lists and publicly available helpline information. However, no specific funding amount for these programs is mandated, leaving it to state regulation. The use of AI to detect gambling problems is recommended but could face resistance from operators wary of proprietary data risks.
Advertising guidelines aim to restrict marketing to those over 21, avoid employing characters appealing to younger audiences, and ban campus promotions. However, some jurisdictions have taken more stringent approaches, like banning celebrities in advertisements.
