What Defines Illegal Casinos in the USA?
The gambling landscape in the United States is dynamic, ever-evolving, and increasingly complex. One of the most pressing concerns facing regulators and players alike is the growing presence of illegal casinos, both online and offline. But what exactly constitutes an illegal casino in the United States? And what are the dangers of participating in unlicensed gambling activities?
In this article, we delve into the specifics of illegal casinos in the USA, the distinction between legal and illegal operations, and the significant risks involved in engaging with unlicensed gambling services.
The Growing Gambling Market in the United States
The gambling offer in the USA is both diverse and expanding rapidly. As personal consumption expenditures on gambling continue to rise, data from the Federal Reserve Economic Data (FRED) shows steady growth year over year, so does the number of people engaging in games of chance, sports betting, online slots, and more.
With the Supreme Court’s 2018 decision to overturn PASPA (the Professional and Amateur Sports Protection Act), the door was opened for states to regulate sports betting individually. Since then, we’ve seen a surge in both land-based and online gambling platforms entering the market. This growth, while beneficial for tax revenues and entertainment options, also raises important questions about oversight and regulation.
The Role of State Licensing
In the USA, gambling regulation is handled primarily at the state level. This means that each state decides for itself whether to allow gambling, and under what conditions. As of May 2025, all USA states except Utah, Hawaii, and Tennessee have legalized some form of gambling and have implemented laws to govern how it may be conducted.
To operate legally within a particular state, a casino, whether land-based or online, must obtain a valid license from that state’s regulatory body. These licenses come with strict compliance requirements designed to protect consumers. Various aspects of the casino are checked if they comply with the legislation of the specific state. The specific requirements to be able to obtain a license vary from state to state. A few examples of specifications are the fairness of games, secure and timely withdrawal of winnings, responsible gambling measures, data protection protocols and regular audits and inspections
A licensed casino has therefore been deemed compliant with the requirements by that state’s regulatory body. The licensed casino is regulated, and continuously monitored by that state’s regulatory body and a reliable operator.
How to Identify a Legal Casino
If you want to ensure that you are gambling safely and legally in the United States, here are a few steps you can take:
- Check State Gambling Authority Websites: Most states have a publicly accessible database of licensed casinos and operators.
- Look for Licensing Information on the Casino Website: Legal operators typically display their licensing details in the footer of their website, check whether the operator has a license in a USA state.
- Beware of Offshore Sites: If the casino is registered outside the USA and does not mention a USA state license, it is likely illegal in your state.
- Read Player Reviews and Forums: Sites like Trustpilot and other review websites can provide community insights into which operators are trustworthy.
- Use Only Reputable Payment Methods: Legal casinos often work with well-known banks and payment processors that also screen operators for compliance.
What Makes a Casino Illegal?
Any casino that lacks a valid state-issued license and still offers gambling services to players in that state is considered illegal. This applies whether the casino operates from a physical location or is based entirely online.
Illegal casinos can fall into several categories:
- Unlicensed Local Casinos: These are land-based gambling operations that have not obtained the required approvals from state authorities.
- Foreign-Based Online Casinos: Many online gambling sites are registered in jurisdictions like Malta, Curaçao, or Gibraltar and operate internationally. If these sites accept USA players without a proper state license, they are considered illegal in those jurisdictions.
It’s important to understand that not all international casinos are inherently illegal, some may be legal in their own country but not in the USA. However, from a USA regulatory standpoint, players are only protected when gambling with state-licensed operators.
Risks of Playing at Illegal Casinos
Engaging with illegal casinos comes with significant risks. While some players may be drawn in by flashy websites, aggressive promotions, or lenient registration policies, these platforms lack the accountability and oversight of their legal counterparts. A lot of research has been done by gambling addiction prevention organizations and lawmakers, wherein the risks of illegal gambling offers have been looked into, concluding that the illegal offer is unreliable and often linked with illegal activities, an example of such a research is the whitepaper of the Gaming Laboratories International.
Here are a few examples of the risks players take when playing and/or participating in an illegal gambling offer:
- Non-Payment of Winnings: One of the most serious issues is when casinos simply refuse to pay out a player’s winnings. With no regulatory body to intervene, the player has little or no recourse.
- Unresponsive Customer Service: Illegal casinos often operate with minimal staffing or outsource support, leading to poor or nonexistent customer service.
- Unfair Game Algorithms: Without independent audits or oversight, illegal operators can manipulate game outcomes, for instance by offering extremely low Return to Player (RTP) percentages or rigging games altogether.
- Risk of Regulatory Penalties: In some states, such as Washington and Illinois, merely participating in illegal gambling may expose players to fines or even criminal charges.
- Data Privacy Risks: Players may unknowingly share personal and financial information with entities that do not follow standard data protection practices, leading to identity theft or fraud.
Conclusion: Play Safe, Play Legal
The USA gambling market offers a wide array of entertainment, but not all casinos are created equal. Illegal casinos, whether they operate underground in local neighborhoods or through international online portals, expose players to numerous risks—from financial loss to criminal penalties.
By sticking with licensed casinos regulated by your state, you not only enjoy a safer and more transparent gambling experience but also contribute to a fair and well-regulated industry. So before you spin that slot machine or place a bet on your favorite sports team, make sure you’re doing so legally.
