At the start of nearly every year, many U.S. gaming companies ask, “is this the year of iGaming?” Historically, that answer has been “no,” but this year kicked off with news that could signal 2026 is different—at least for one state.
Online casino gaming, referred to generally as iGaming, has been a hot topic in the legislatures of many states over the last several years. In the wake of the Supreme Court repealing the Professional and Amateur Sports Protection Act in 2018, most states have now legalized sports wagering in one form or another. However, only seven states have legalized iGaming; other states legislatures have generally rejected online gaming expansion in recent years, primarily due to concerns with political optics and public health impacts.
However, on January 11, 2026, Maine Governor Janet Mills allowed LD 1164 to become law without her signature. With an effective date in mid-July, at the end of the current legislative session, Maine will soon become the eighth state to allow iGaming. Specifically, the bill allows the state’s four federally-recognized tribes to offer iGaming throughout the state, permitting each tribe to partner with one third-party operator partner—effectively allowing four iGaming operators in the state.
But Maine isn’t operating in a vacuum. Just weeks later, lawmakers in Virginia advanced similar legislation. With popular unregulated sweepstakes casinos facing legislative bans and prediction markets threatening traditionally regulated gaming verticals, states may choose to look at regulated iGaming from a more positive perspective in 2026.
The Maine Event
The path to iGaming legalization in Maine wasn’t without challenges. The legislature passed LD 1164 in June 2025, but Governor Mills held the bill, leaving its fate uncertain for months. Ultimately, she chose a “pocket pass,” allowing the bill to become law without her signature in January. In a statement, Mills cited concerns over public health but conceded that “this new form of gambling should be regulated.” This political tension around legalizing iGaming is echoed by other politicians—such as Governor DeWine in Ohio—who are reluctant to support expanded online casino gaming, citing public health and policy concerns.
However, in the face of proliferating alternative options that operate outside of state regulation or taxation, states may be forced to reevaluate. Said plainly, if people are playing anyway, there’s a strong argument that perhaps regulation of a new form of gambling is preferable from both a tax revenue and consumer protection standpoint; Governor Mills’ comments align with this viewpoint.
Virginia Advancing iGaming Bill
Maine isn’t the only state reevaluating its stance. In early February, a Virginia House subcommittee advanced HB 161, a bill that would legalize online casino gaming in the Commonwealth.
Much like Maine, Virginia’s move is likely driven by a desire to bring an existing activity into the regulated fold. With a mature sports betting market and land-based casinos already established—and its state-run online lottery options expanded to include some casino-style games— fully realized and regulated iGaming could be a next logical step, especially given the current state of the gaming market.
The Changing Market Dynamics
These legislative moves come at a time of significant shift in the U.S. gaming ecosystem. States with established and regulated sports wagering are observing new market dynamics that suggest a need for diversification, and unregulated operators continue to prove interest in the product.
- The Prediction Market Factor: Prediction markets are rapidly gaining ground, even as they are facing significant legal challenges from state regulators. Platforms like Kalshi and Polymarket have moved well beyond political forecasting, offering event contracts that look and feel similar to sports bets to the average consumer. As these markets grow, they present a product that sits outside traditional state gaming regulations and tax structures, understandably making state regulators and legislatures uneasy about the durability of existing gaming tax revenues as well as existing consumer protection frameworks.
- The Sweepstakes Signal: Simultaneously, the popularity of unregulated sweepstakes casinos provides a clear signal: constituents want to play. Legislative bans that block sweepstakes casino verticals may address some significant and legitimate concerns that state legislatures have with the platforms, but they may again push current players to shadier black-market options with still fewer protections, such as regulated responsible gaming limits.
Rather than viewing this solely as a regulatory or enforcement challenge, forward-looking states like Maine—and potentially Virginia—are viewing it as an opportunity. If constituents are already seeking out these experiences, there is a strong argument for offering a state-regulated alternative that provides consumer protections while generating tax revenue.
We are continuing to monitor the gaming market and legislative dynamics around the nation.