US Gambling Rules: Multi-State Regulatory Tightening in 2026

Nearly 28 states across the United States are tightening their gambling laws, marking a shift towards a more comprehensive, multi-pronged regulatory framework to enhance oversight, mitigate risk, and ensure compliance across the sector. The regulations mainly target sweepstakes-style and social casino platforms, micro-betting, online sports wagering, and even physical gaming machines. They have come under increased scrutiny due to concerns around addiction, integrity, and consumer protection.

The changes are being introduced at the state level, with different legislatures and regulators forming their own rules and restrictions on online betting and multiple states independently revisiting and strengthening their existing laws.

New Jersey lawmakers have proposed a bill (Senate Bill 2160) to ban micro-betting, a fast-growing form of wagering on minute, real-time events within a game. In California, restrictions have been imposed on blackjack-style and player-dealer games in certain gaming establishments. California also enacted AB 831, which banned dual-currency sweepstakes casinos effective January 1, 2026. New tax frameworks and tighter compliance requirements have been introduced by several states for online betting operators. At the same time, states are also revisiting the regulation of physical gaming machines.

Regulation of sweepstakes and social casino platforms has become a major area of focus, as they often operate using virtual currencies or token-based systems. In 2025-2026, six states enacted explicit bans: Montana (first to ban in May 2025), Connecticut, New Jersey, New York, California, and Indiana. In Connecticut, proposals include age-based restrictions on prediction markets, while Hawaii is considering broader prohibitions on prediction markets by July 2026, reflecting concerns over speculative betting models tied to real-world events.

Sports betting is another major area of focus, with some states specifically targeting “micro bets,” which involve rapid, play-by-play wagers during live sporting events. In Indiana, proposed measures (SB 120, the Student Athlete Protection Act) aim to restrict proposition bets involving individual college athletes, while Tennessee (HB 1768) is considering limits on betting activity on college campuses. Together, these developments reflect a growing emphasis on protecting college sports and younger populations from gambling-related risks.

Further, the proposed Bettor Health Act (Senate Bill 302) in Massachusetts seeks to establish a comprehensive regulatory framework that includes restrictions on in-play betting and proposition bets, advertising limitations during televised sporting events, and affordability checks for users. The bill also proposes raising the state’s tax on online sports betting from 20% to 51%. Additionally, the Ohio Casino Control Commission took administrative action in February 2024 to prohibit proposition bets involving college athletes, becoming one of approximately 25 states to restrict or limit such wagers.

The current structure of U.S. gambling law is based on the landmark decision in Murphy v. National Collegiate Athletic Association, 2018, in which the U.S. Supreme Court struck down the federal prohibition on state-authorised sports betting. It was after this decision that the states developed their own regulatory approaches. The focus of earlier state frameworks was market entry, licensing, and revenue generation; it has now been shifted to consumer protection, responsible gambling, and integrity safeguards.