State Legislators Push for Rapid iGaming Expansion and Sweepstakes Crackdowns in Early 2026

A wave of new gambling legislation has hit statehouses across the country this week, focusing on the legalization of online casinos and increased regulation of prediction markets. Lawmakers in several key territories are weighing the potential for significant tax revenue against growing concerns regarding unregulated gaming platforms.

By: AXL Media

Published: Feb 13, 2026, 4:29 PM EST

Source: This report is a comprehensive analysis based on data originally documented by Gambling Insider

iGaming Expansion Takes Center Stage in Hawaii and Maryland

Legislative sessions in early February have seen a renewed push for digital gambling legalization. In Hawaii, lawmakers are currently debating a bill that would establish a regulated iGaming market, a significant move for one of the few states that historically has not permitted any form of legal wagering. Proponents argue that the state is losing millions in potential tax revenue to offshore sites and that a regulated framework is necessary for consumer protection.

Meanwhile, Maryland continues its march toward a full online casino rollout. Following successful sports betting implementation, a new House bill seeks to authorize iGaming licenses for existing land based casino operators. Financial projections included in the bill suggest that a mature Maryland iGaming market could generate over $300 million in annual tax contributions for the state’s Education Trust Fund.

Crackdowns on Unregulated "Sweepstakes" Casinos

A major theme of this week’s legislative activity is the intensifying scrutiny of sweepstakes based gaming platforms. Regulators in several states, including Michigan and Connecticut, have issued cease and desist orders to prominent social casino operators. New legislation introduced in the Georgia General Assembly aims to explicitly define these platforms as "illegal gambling" if they offer prizes with real world value.

The American Gaming Association has voiced strong support for these measures, claiming that sweepstakes sites bypass the rigorous licensing and responsible gaming requirements imposed on traditional online operators. Industry experts predict that at least five more states will introduce bills to restrict or tax these platforms by the end of the 2026 legislative cycle.