ONLINE GAMING - With the US economy in a decidedly uncertain condition at the moment many states are currently trying to work out ways that they can balance the books. Traditionally, the most quick and effective solution has been to raise taxes, always an unpopular move if they are personal ones.
But the increasing expansion of online casinos across the country has introduced a new possibility. By taxing the online operators on profits it wouldn’t touch the finances, at least directly, of their players.
One state where this is a tantalizing possibility is California. With the highest population of any state and a well-established entertainment economy it has been estimated that by legalizing online casino gambling it could benefit to the tune of $570 million or more each year in additional revenue.
Already, the Supreme Court’s historic 2018 decision to allow sports betting has seen many states benefit from the revenue it generates. However, there are several hurdles to cross before both sports betting and online casinos can be legalized in the state.
How other states have fared
One particular state that can be held up as a prime example of permitting online casinos is New Jersey, coincidentally one of the main agitators for the legalization of sports betting.
In 2025 its annual revenue from the sector amounted to $2.9 billion and in 2026 it is predicted to rise even higher.
From this the state receives taxes paid by the online operators as well as the thousands of dollars each one has to pay for the licence to do business legally. When one considers that California’s 40 million population is four times that of New Jersey the potential is easy to see.
The perfect conditions
It’s not simply the size of the population that could prove invaluable; it’s the nature of the people. Unsurprisingly for the home of Silicon Valey, Californians are, by and large, very tech-savvy so would have no problem getting to grips with the technicalities of online casino play.
The record levels of smartphone and internet penetration would also play into this, as would the ever-increasing thirst for digital entertainment of all kinds. It all adds up to what some might see as the perfect storm.
In other states where gambling isn’t fully regulated, sweeps casinos are proving to be particularly popular. Sweepstakes casinos offer an accessible and entertaining alternative to traditional online gambling. By using virtual currencies and promotional sweepstakes entries, they let players enjoy slots and table-style games without requiring direct wagers.
This model can lower financial risk while still delivering excitement, variety, and potential rewards. Many platforms also provide generous bonuses, social features, and flexible play options, making them appealing to casual players who value fun, convenience, and a more relaxed gaming experience overall.
An element of resistance
With revenue to be raised and people eager to be entertained you might think that there would be no argument to be made against allowing online casinos to start operating in the Golden State. However, there are a number of factors that are set to get in the way. The first of these is the state government’s comparatively firm stance against gambling. As things stand at the moment it’s an activity that is banned except in tribal casinos, licensed card rooms for playing poker, the state lottery and on horse racing.
The trend also seems to be towards more restrictions, not fewer. In 2025 a bill brought about by Governor Gavin Newsom banned sweepstakes gambling. The fact that the bill was voted through unanimously indicates the strength of feeling the subject stirs up.
There are also the tribal casinos who have already shown their opposition to online betting. Already the state’s Pechanga and San Manuel tribes put up strong opposition to online sports betting, fearing that it would eat into their revenues.
There are also concerns about the potential social harm that gambling can cause as well as the complexities of policing the sector. So, this is the context against which any moves to bring about legalization would have to be considered.
A question of balance
Beyond the taxes that the online casino sector could raise for the state, there are several other, secondary benefits that need to be considered. The first of these is the increase in employment opportunities it could bring. With unemployment rates in some parts of the state reaching 21% any new jobs would be more than welcome.
Some of the revenue generated would also undoubtedly be funnelled into improving the digital infrastructure and public services of California, hugely benefitting the population, whether they are players themselves or have no intention of ever placing a bet.
Lessons to be learned
So, a very good start would be to look at some of the eight states where online casinos have been introduced to see how they have overcome resistance.
For example, in Wisconsin legislation has been introduced to involve tribal casinos in acting as an official hub from which online operators can be accessed.
Also, by working with the operators themselves such as FanDuel and DraftKings, the state can benefit from their experience in the successful introduction of online casinos. So, while there may still be some way to go before California can start to benefit from a potential $570 million + boost to its finances the possibility is there.
And it could pay to keep a close eye on developments that may turn this into reality.
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