New recommendations also set daily deposit limits of $20,000 for online gambling

The National Council of Legislators from Gaming States (NCLGS) has unveiled a draft model iGaming legislation aimed at assisting US states in regulating online gaming.

The Model Internet Gaming Act includes various suggested policies for state legislators, regulators, and stakeholders to consider. According to the NCLGS, this model legislation is intended to create an “effective, comprehensive, and efficient regulatory framework” that promotes “public confidence and trust in the integrity of the regulatory process and the fairness of internet gaming operations.”

Draft Key Highlights

• Online gaming tax rate 15-25%
• Daily deposit limits of $20,000
• Online sweepstakes and social casinos banned
• Credit card use banned
• No celebrity endorsements that may appeal to minors

A key recommendation in the model framework includes a tax rate for online gaming set between 15% and 25%, with an average of 19% observed across the US. Additionally, individual deposits over a 24-hour period should not exceed $20,000.

Online sweepstakes games are explicitly banned under the draft.

“Any person or entity found in violation of this section shall be subject to a fine of not less than $10,000 and not more than $100,000 for each violation and subject to potential loss of gaming licence – Repeat offenders shall be subject to increased fines, potential loss of gaming licence and potential imprisonment of up to two years.”

Deposits and withdrawals would be allowed through various means, including debit cards, digital wallets, bank wires, and cash at casinos or approved retail locations. However, the use of credit cards is prohibited under the draft legislation.

The framework also emphasizes responsible gaming practices, requiring each online operator to appoint a Responsible Gaming Lead who will ensure at-risk customers receive the right information and support.

Marketing guidelines in the draft include restrictions on using “characters, performers or influencers who primarily appeal to audiences under the age of 21.”

The NCGLS stated:

“In crafting this document, we fully realise that each state has a unique gaming sector with disparate interests and concerns. Nonetheless, we believe the regulatory framework set forth herein may be a useful tool for consideration as states embrace the vast potential of internet gaming. Nothing herein shall be intended to regulate any aspect of tribal gaming, which is governed exclusively by the Indian Gaming Regulatory Act and individual state compacts.”

The proposed Model Internet Gaming Act will remain open for public comment until December 31.

Sweepstakes Casinos Under Scrutiny

Sweepstakes casinos in the United States have come under intense scrutiny in recent months amid class action lawsuits.

Class action lawsuits allege that some sweepstakes platforms exploit vulnerable individuals by replicating real-money gambling experiences without implementing sufficient safeguards. Plaintiffs argue that these platforms engage in predatory practices, such as encouraging excessive spending under the pretense of offering “free” gameplay. Notably, Australian company VGW is currently facing 12 lawsuits in the United States, with the latest class-action suit filed in Connecticut.

At present, only two states have banned sweepstakes casinos — Washington and Idaho.

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