Casinos in the United States: What Federal Law Really Says

American casinos operate in one of the most dynamic and opportunity-rich legal landscapes in the world. While flashing lights and big jackpots get the headlines, it is the legal framework — especially federal law — that quietly makes large-scale, profitable, and increasingly innovative casino projects possible.

If you are an investor, operator, tribal leader, or simply a well-informed player, understanding what U.S. federal law actually says about casinos gives you a powerful advantage. It helps you see where the real opportunities are, how to manage risk intelligently, and why the market for gaming in the United States keeps growing.

Federal vs. State Power: Who Really Regulates U.S. Casinos?

One of the biggest misconceptions about American casinos is that there is a single, unified federal law that either “allows” or “bans” gambling. In reality, the system is more nuanced — and far more favorable to business development than many people assume.

In the United States, casino regulation rests on a balance between state-level authority and specific, targeted federal laws.

• Statesdecide whether to allow casinos, what forms of gambling are legal, tax rates, licensing standards, and consumer protections.
• The federal governmentsteps in mainly to address issues that cross state borders or national interests: tribal sovereignty, interstate commerce, sports betting, online transactions, and anti-money-laundering protections.

This division is not an accident. It flows from the U.S. Constitution, which reserves most police powers (including gambling regulation) to the states while giving the federal government authority over interstate and international matters.

Why This Division Benefits the Casino Industry

For the gaming sector, the shared structure of state and federal power creates several concrete advantages.

• Flexibility and experimentation– Different states can design casino models that fit local demand, from destination resorts to tribal casinos to riverboats or racinos.
• Multiple entry points– Operators can choose jurisdictions that match their risk profile, tax preferences, and brand strategy.
• Clear federal “guardrails”– Federal law creates predictable boundaries around areas such as tribal gaming, online payments, and sports betting, reducing uncertainty for serious investors.
• Room for innovation– As technology evolves, states can pilot new models (like mobile sports betting) within the broad framework permitted by federal law.

Instead of a single rigid rulebook, the U.S. offers a layered legal environment where savvy stakeholders can find or build the right niche.

The Cornerstone of Tribal Casinos: The Indian Gaming Regulatory Act (IGRA)

When people talk about “what federal law says” about casinos, theIndian Gaming Regulatory Act(IGRA), enacted in 1988, is the central piece. This landmark federal law set the foundation for modern tribal gaming and helped create a multi-billion-dollar segment of the American casino industry.

What IGRA Does

IGRA was passed to balance three core goals:

• Promotetribal economic development, self-sufficiency, and strong tribal governments.
• Ensure that gaming is conductedfairly and honestlyfor both tribes and players.
• Shield gaming fromorganized crime and corrupting influences.

To accomplish this, IGRA introduced a structured framework for gambling on tribal lands.

The Three Classes of Tribal Gaming Under IGRA

IGRA classifies gaming on tribal lands into three categories, each with different regulatory requirements and business implications.

Benefits IGRA Unlocks for Tribal Nations and Partners

IGRA created a structured path for tribes to use gaming as a powerful economic engine.

• Economic empowerment– Revenues can support housing, education, healthcare, and essential infrastructure in tribal communities.
• Sovereign control with clear rules– Tribes retain decision-making authority while operating within a well-defined legal framework that investors and regulators understand.
• Opportunities for partnerships– Third-party operators, management companies, and financiers can work with tribes under models that are recognized and regulated at the federal level.
• Long-term stability– Once tribal–state compacts are in place, they often cover multi-year periods, supporting long-range planning and large-scale capital projects.

For anyone considering involvement in tribal gaming, a solid grasp of IGRA is not just a legal requirement; it is a competitive advantage.

The Wire Act: Limits on Interstate Sports Betting Communications

Long before smartphones and online sportsbooks, Congress enacted theWire Act of 1961. Originally aimed at combating organized crime and illegal sports betting operations, the Wire Act is still a key federal law affecting modern wagering.

What the Wire Act Covers

The Wire Act makes it a federal offense, under certain conditions, to use “wire communication facilities” (historically telephones, now understood more broadly) to transmit:

• Wagers or betting information across state or national borders, when the activity is illegal in the receiving jurisdiction.
• Information that assists in placing such bets on sporting events or contests, under specified circumstances.

Over the years, there has been debate about how far the Wire Act stretches, particularly with respect to non-sports online casino games. However, as a practical matter, its most direct impact remains tied tosports-related betting across state lines.

Why the Wire Act Still Matters in a Mobile Era

For today’s operators and technology providers, the Wire Act is important because it helps shape:

• How and where servers, payment processing, and data routing are located and configured.
• How multi-state pools, cross-border promotions, or interstate marketing are designed.
• Compliance strategies for online and phone-based sports betting offerings.

The upside is that a clear federal rule, combined with state-level legalization of sports betting, encourages serious operators to invest in robust compliance architectures, creating a market that rewards professionalism and long-term thinking.

UIGEA: The Federal Rules on Internet Gambling Payments

As online gambling began to grow in the early 2000s, Congress addressed one specific piece of the puzzle: the flow of money. TheUnlawful Internet Gambling Enforcement Act of 2006(UIGEA) targets financial transactions tied to certain forms of illegal online gambling.

What UIGEA Actually Does

UIGEA doesnotcreate a new federal crime simply for placing a bet online. Instead, it focuses onpayment systems. The law:

• Requires banks, payment processors, and other financial institutions to identify and block certain transactions connected to illegal internet gambling.
• Works in tandem with state laws: if a form of internet gambling is illegal under relevant state or federal law, payment processors must prevent or restrict those payments.

At the same time, UIGEA acknowledges that not all online wagering is unlawful. It leaves room for:

• Intrastate online gambling– Where states authorize online casino or poker within their borders under defined safeguards.
• Intratribal internet gaming– Under specific conditions involving tribal jurisdiction.
• Certainfantasy sportsand other activities that meet statutory criteria.

How UIGEA Creates Opportunities for Compliant Operators

For legitimate businesses, UIGEA is less a barrier and more a filter. It makes it harder for unregulated, offshore, or fly-by-night sites to operate in the shadows, which in turn benefits properly licensed and compliant operators.

• Cleaner payments ecosystem– Stronger rules reduce the risk of chargebacks, fraud, and regulatory surprises.
• Higher trust from financial partners– Banks and payment providers are more willing to collaborate with operators who demonstrate rigorous UIGEA compliance.
• Better customer experience– When payments are legal and well-structured, deposits, withdrawals, and promotions run more smoothly for players.

The result is a more professional, scalable online gaming market where serious operators can confidently invest.

PASPA’s Repeal: Opening the Door to Legal Sports Betting

For many years, nationwide sports betting was heavily constrained by theProfessional and Amateur Sports Protection Act of 1992(PASPA). PASPA largely prohibited states from authorizing sports wagering, with limited exceptions.

In 2018, the U.S. Supreme Court, in a case involving New Jersey, held that PASPA’s restrictions on state authorization of sports betting violated principles of state sovereignty. As a result, PASPA’s core provisions are no longer enforceable.

What PASPA’s Fall Means in Practice

The end of PASPA didnotautomatically make sports betting legal everywhere. Instead, it removed a federal obstacle and returned the decision to the states.

• Each state can now decide whether to authorize sports betting and under what conditions.
• States can choose between retail-only, mobile-only, or hybrid models with both in-person and online wagering.
• Tribal and commercial operators can participate where state law and tribal–state compacts allow.

This shift has triggered a wave of legislative activity and opened the door to a rapidly expanding, regulated sports betting industry across much of the country.

Business Advantages in the Post-PASPA Landscape

With PASPA no longer blocking state authorization, there are several major advantages for market participants.

• Clear, state-by-state opportunities– Operators can target new markets as states legalize and roll out licensing frameworks.
• Brand expansion– Casinos can integrate sportsbooks, mobile apps, and cross-promotions to deepen customer engagement.
• Data-driven innovation– Legal markets support sophisticated analytics, in-play wagering structures, and responsible gaming tools that are difficult to implement in gray markets.

Federal law now plays more of a background role in sports betting, with states leading the charge on market design and consumer protections.

Federal Anti-Money-Laundering Rules: Building Trust at the Tables

Casinos of a certain size in the United States are treated as “financial institutions” under federal law, which means they must comply with robustanti-money-laundering(AML) and recordkeeping rules.

The core framework comes from theBank Secrecy Act(BSA) and related regulations, enforced by federal agencies including the Financial Crimes Enforcement Network (FinCEN).

Key AML Obligations for Casinos

While technical requirements are detailed, some of the most important duties include:

• Customer identification and due diligence– Verifying the identity of certain patrons and understanding the nature of their activity.
• Currency Transaction Reports (CTRs)– Reporting cash transactions at or above specified thresholds.
• Suspicious Activity Reports (SARs)– Reporting transactions that appear to involve potential money laundering or certain other illicit activity.
• Internal AML programs– Policies, training, and monitoring systems designed to detect and prevent abuse.

Why AML Compliance Is a Strategic Asset

Though compliance demands investment, it brings meaningful long-term benefits.

• Enhanced reputation– Strong AML controls reassure regulators, banks, investors, and high-value patrons.
• Reduced enforcement risk– Proactive compliance helps prevent costly penalties and operational disruptions.
• Stronger partnerships– Financial institutions and technology vendors prefer to work with casinos that take AML seriously.

In competitive markets, a well-run compliance program is not just a cost center; it is a sign of operational maturity that can differentiate top-tier properties from the rest.

Other Federal Rules Casinos Should Know

In addition to the headline laws, several other federal statutes and regulations can affect casino operations and strategy.

The Johnson Act: Gambling Devices and Interstate Commerce

TheJohnson Actgenerally restricts the manufacture, transportation, and possession of certain gambling devices when they cross state lines into jurisdictions where such devices are illegal. For modern casino operators and suppliers, this means:

• Being mindful of where slot machines and other regulated devices are shipped or stored.
• Aligning equipment distribution with both federal requirements and varying state laws.
• Working with manufacturers who fully understand and comply with device registration and reporting obligations.

When handled correctly, the Johnson Act becomes simply another compliance checkpoint in a well-managed supply chain.

Federal Tax Reporting for Winnings

Another important area is tax reporting. Federal tax law requires casinos to report certain winnings to the Internal Revenue Service (IRS) and, in many cases, to withhold a portion of the payout.

Examples include:

• Reporting specified slot machine jackpots and bingo winnings above defined thresholds.
• Documenting certain keno, poker tournament, and other game winnings.
• Issuing information statements to winning players so they can file accurate tax returns.

While exact thresholds and procedures can change over time, the larger point remains: federal reporting rules help normalize gambling as a mainstream economic activity, which is positive for long-term industry legitimacy.

What Federal Law Does Not Do

Understanding what federal lawdoes notcover is just as important as knowing what it does.

• There isno single federal licensethat allows you to open a casino anywhere in the United States.
• Federal law doesnotset specific rules for table layouts, payout percentages, or player loyalty programs.
• Issues likeage limits, self-exclusion lists, and most consumer protectionsare largely designed and enforced at the state or tribal level.

This means that the real “fine print” governing casino operations still comes from state gaming commissions and tribal regulators, all operating within the boundaries set by federal law.

Strategic Opportunities in the Current Legal Framework

When you zoom out, a clear pattern emerges: U.S. federal law on casinos is not designed to shut down gaming, but to shape it. Within those guardrails are powerful opportunities.

For Tribal Nations

• Long-term economic planning– IGRA and tribal–state compacts enable predictable revenue streams that can support multi-decade development strategies.
• Diversification– Casino revenues can fund diversification into hospitality, entertainment, tourism, real estate, and other economic ventures.
• Stronger governance capacity– Managing complex gaming operations often accelerates the development of legal, financial, and managerial expertise within tribal governments.

For Commercial Operators

• Market selection– A mosaic of state laws, layered over a stable federal framework, lets operators choose the most promising jurisdictions and products.
• Brand extension into digital– UIGEA-compliant payment structures and state-authorized online gaming channels open doors to omnichannel customer experiences.
• Sports betting integration– Post-PASPA, casinos can combine traditional gaming with sports wagering, entertainment, dining, and events to create high-value destination properties.

For Investors and Financial Partners

• Regulatory clarity– Federal laws like IGRA, the Wire Act, UIGEA, and the BSA provide a clear reference point for due diligence.
• Scalable models– Operators that succeed in one compliant jurisdiction can often replicate or adapt their model across multiple states.
• Risk management– Defined federal rules help identify, price, and mitigate regulatory risk, making structured financing more feasible.

Frequently Asked Questions About Federal Law and U.S. Casinos

Is casino gambling legal at the federal level in the United States?

Federal law does not impose a blanket ban on casino gambling. Instead, it sets conditions and boundaries around specific topics such as tribal gaming, interstate betting, online payments, and anti-money-laundering, while leaving core legalization and regulation decisions to states and tribal governments.

Can the federal government shut down casinos that are legal under state law?

Where casinos comply with both state and applicable federal law, federal authorities typically do not interfere with day-to-day operations. Issues arise mainly when operations violate federal statutes (for example, by ignoring AML rules or engaging in unauthorized interstate wagering) or when there is evidence of criminal activity.

How does federal law affect online casino games compared with land-based casinos?

Land-based operations are primarily shaped by state or tribal law plus federal AML and tax reporting rules. Online offerings must account for additional federal constraints, including the Wire Act and UIGEA, and must be carefully designed to operate within authorized jurisdictions. The advantage for compliant operators is a clearer, more stable environment than unregulated offshore markets can provide.

Is sports betting now fully legal across the United States?

Sports betting ispermitted to be legalizedby states since the core restrictions in PASPA were struck down, but it is not automatically legal everywhere. Each state chooses whether and how to authorize sports wagering, and operators must be licensed and compliant in every jurisdiction where they accept bets.

Turning Legal Knowledge Into Competitive Advantage

The U.S. casino sector is not a legal free-for-all, nor is it locked down by a single prohibitive federal law. It is governed by a set of focused federal statutes that create structure and predictability, layered over state and tribal systems that allow for innovation and growth.

For operators, tribal nations, investors, and serious players, understanding what federal law really says allows you to:

• Identify promising markets and partnerships with greater confidence.
• Design compliant products and experiences that can scale.
• Build trust with regulators, financial institutions, and customers.

In other words, federal law is not just a list of restrictions. It is part of the architecture that supports one of the world’s most dynamic casino and gaming ecosystems — and for those who understand it, a powerful roadmap to long-term success.