Our Big Three Predictions for the Online Gaming Industry in 2025

By: Sara Dalsheim

In 2025, we will celebrate the seventh anniversary of the repeal of PASPA and the resulting increase in legalization and popularity of various offerings in the gaming industry – namely sports wagering and online casino gaming.

We predict 2025 will bring the following to the industry: (1) further actions from state authorities to fight back against the illegal offshore market; (2) further clarifications from state authorities on how they characterize and draw the line between sports wagering and daily fantasy sports; and (3) stronger pushes for more legally permissible forms of online wagering and gaming.

Prediction 1: Further Actions from State Authorities to Fight Back Against the Illegal Offshore Market

Since the legalization of sports wagering, the industry has pushed for federal authorities to step in and help the industry combat the omnipresent offshore market that remains the biggest competitor of the regulated gaming industry. However, federal authorities have failed to step in and help the legalized gaming industry stomp out the illegal offshore market. Instead, we have seen several state legal authorities and regulators step up to the challenge to force out an offshore operator. In 2024, Michigan gaming authorities started their efforts to stamp out offshore operators by issuing a cease-and-desist letter to Bovada. Several other state legal/regulatory authorities–including those in Arizona, Colorado, Connecticut, Kansas, Louisiana, Massachusetts, Ohio, Pennsylvania, and West Virginia–followed Michigan’s lead and sent out their own cease-and-desist letters to Bovada. Tennessee also fined Bovada in 2024 for failing to respond to several of their cease-and-desist letters. Currently Bovada only restricts access to its platform in the following jurisdictions: Arizona, Colorado, Connecticut, Delaware, District of Columbia, Kansas, Louisiana, Maryland, Massachusetts, Michigan, Nevada, New Jersey, New York, Ohio, Pennsylvania, Tennessee, and West Virginia.

Although the industry, including the American Gaming Association, and the online interactive business trade association iDEA (iDevelopment and Economic Association), have pleaded for the U.S. Department of Justice to address the problem of the illegal market, we predict that we will not see a federal crackdown within the next year. Instead, and based on the success state authorities have had against stamping out one offshore wagering platform, we predict that not only will more states follow suit and issue their own cease-and-desist letters against Bovada, but states will ramp up their actions and letters against further prominent offshore books. Perhaps we will even see some state regulators working together to investigate and crackdown on unregulated offshore gambling sites. State regulators, then, appear poised to fill in the void of federal disinterest.

Prediction 2: Further Clarifications from State Authorities on How They Characterize and Draw the Line Between Sports Wagering and Daily Fantasy Sports

The gaming industry has also been trying to delineate where it draws the line between sports wagering and daily fantasy sports. This push started in late 2023 and continued into 2024 with some states sending out cease and desist letters to pick’em or single-player DFS operators; other states decided to amend or establish further clarifications to their fantasy sports regulations to clarify whether a single-player offering can be considered permitted fantasy sports.

In response to this, creative game developments were made. We saw prominent DFS operators working collaboratively with gaming regulators to permit new types of daily fantasy sports offerings; notably, the newer peer-to-peer pick’em games, that fall under permitted fantasy sports and are not considered sports wagering in most states. As the regulated market continues to grow, we predict that more states will send out letters or issue clear rules to clarify what types of offerings fall under each category. Furthermore, we predict that operators will continue to be creative with new types of fantasy offerings and work collaboratively with regulators to provide these DFS games in a safe and regulated market. Within the coming year, whether an offering is considered sports wagering or a fantasy offering will be even more clearly delineated for the industry and consumers alike.

Prediction 3: Stronger Pushes for More Legally Permissible Forms of Online Wagering and Gaming

We do not predict any slowdown in the gaming industry in the coming year. New forms of gaming will continue to be established. In 2024 we saw growth and popularization in various forms of games of skill (i.e., sports prediction-type games, and other DFS type products discussed above) and most notably with sweepstakes styled gaming.

It is our prediction that these areas of gaming will continue to grow in breadth and popularity. The response from the regulated gaming industry will be to find a way to offer these games to consumers in a way that is safe and regulated. Pushes for legalization may come through more encompassing gaming laws and regulations so that these types of offerings also require licensing or registration. Alternatively, perhaps, states will appreciate the demand and popularity of these offerings and make a stronger push to legalize either online casino gaming, or even sports wagering, for those states in the dwindling minority that have not already chosen to do so.

In the past seven years, it has been clear that the demand and popularity of online gaming is steadfast in an upward trajectory. Throughout the years the industry has taken productive steps to clear out the legal grey area offerings by legalizing and regulating various gaming markets, and our broadest prediction is that the industry will and should continue to do so.