Sports betting regulation news in 2026 is not just about which states have legalized wagering. It is about what is happening inside the markets that already exist, where tax structures are being challenged, where tribal negotiations are blocking progress, and where the two largest unregulated markets in the country, California and Texas, continue to sit on the sideline.
As of May 2026, sports betting is live in 39 states plus Washington D.C. and Puerto Rico. Missouri became the 39th state when it launched on December 1, 2025. Wisconsin signed online betting into law on April 9, 2026, but has not yet launched. Smart Bet Insider tracks legal sports betting by state and covers the regulatory developments that affect where and how you can bet.
The Biggest Story: Illinois Tax Wars
Illinois is the most turbulent regulated market in the country heading into 2026. The state replaced its flat 15% operator tax with a progressive tiered structure in 2024, pushing the largest sportsbooks like FanDuel and DraftKings to a 40% rate. A per-wager fee followed in 2025, charging operators $0.25 on the first 20 million bets and $0.50 per wager after that.
The per-wager fee produced a 15% drop in total wagers placed between September 2024 and September 2025, the only jurisdiction across all 30 states with online betting to see a decline of that scale. FanDuel and DraftKings passed the fee to customers as a flat $0.50 surcharge. Other operators raised minimum bet thresholds, with BetRivers jumping from $1 to $5.
Chicago layered its own 10.25% city tax on top of the state structure effective January 1, 2026. The Sports Betting Alliance, representing FanDuel, DraftKings, BetMGM, bet365, and Fanatics, filed suit challenging the city’s authority to impose local taxes under the state’s Sports Wagering Act.
All five operators were subsequently licensed and betting continued without interruption. A bill to repeal the per-wager fee entirely was introduced in February 2026 and remains active. Despite the volume decline, the per-wager tax generated $60 million in the first six months of fiscal year 2026, above the projected $40 million.
Missouri: Live as of December 2026
Missouri voters approved sports betting via Amendment 2 in November 2024. The Missouri Gaming Commission established regulations and began accepting license applications in May 2025, with a mandated launch deadline of December 1, 2025. Nine sportsbooks went live simultaneously at 12:01 a.m. on that date, making Missouri the 39th legal market in the country. All major operators including FanDuel and DraftKings are now live in the state.
Wisconsin: Legal but Not Yet Live
Wisconsin Governor Tony Evers signed online sports betting into law on April 9, 2026. The law grants Wisconsin’s federally recognized tribes exclusive rights to operate mobile sportsbooks, meaning commercial operators like DraftKings and FanDuel cannot offer independent apps in the state. Launch is expected several months after the law took effect, pending tribal regulatory setup.
States to Watch in 2026
Georgia is the top target for legalization advocates. HB 910 seeks to authorize mobile betting under the Georgia Lottery without requiring a constitutional amendment, which would remove the most common legislative obstacle. Both chambers failed to advance discussions in the most recent session, however, and the path to a 2026 launch is narrow.
Minnesota passed a sports betting bill in 2022 but has not launched due to an ongoing dispute between tribal gaming operators and racetrack owners over exclusivity rights. The 2025-26 legislative session is the next major opportunity. The Senate bill SB 3414 includes push-notification restrictions and mandatory responsible gambling tools, signaling that integrity and consumer protection are now embedded in any viable Minnesota bill.
Texas faces a constitutional barrier. Any legalization effort requires a two-thirds vote in both chambers before it can go to voters. The legislature did not move meaningfully on sports betting in its 2025 session, and the next opportunity does not arrive until 2027.
California is the largest unregulated market in the country, representing roughly 10% of the US adult population on its own. The tribal coalition that opposed the 2022 ballot measure is expected to begin drafting a 2028 initiative. No serious legislative path exists before then.
Alabama has an active constitutional amendment proposal, SB 257, that would put sports betting, a lottery, and casinos before voters. It needs 21 Senate votes to advance and currently falls short of that threshold.
Hawaii introduced mobile sports betting legislation in early 2026, the first substantive movement in years, but the state remains among the most restrictive gambling jurisdictions in the country with no clear launch timeline.
Federal Developments: The OBBBA and Prediction Markets
Congress passed the One Big Beautiful Bill Act in 2025, which caps federal deductions for gambling losses at 90% of total losses effective January 1, 2026. The change affects professional bettors most directly but creates tax complications for recreational gamblers who track losses against winnings.
Prediction markets, specifically platforms like Kalshi and Polymarket that offer contracts on sports outcomes, are drawing regulatory attention in 2026. Hawaii introduced HB 2198, which would define these platforms as illegal gambling and ban them by July 2026. Several other states are monitoring the issue. The CFTC, which regulates prediction markets at the federal level, has not yet issued definitive guidance on sports event contracts.
States With No Legal Sports Betting
States With No Regulated Sports Betting
As of May 2026, the following states have no licensed, regulated sports betting framework: Alabama, Alaska, California, Georgia, Hawaii, Idaho, Minnesota, Oklahoma, South Carolina, Texas, and Utah. That does not mean betting is a criminal act in all of them. Most exist in a grey area where no state law explicitly criminalizes individual players using offshore platforms, and enforcement has historically focused on operators rather than bettors.
California and Texas represent roughly 22% of the US adult population combined and remain the two most consequential unregulated markets in the country.
The exceptions are Utah, which bans all gambling outright under state law, and Washington State, where online gambling is a Class C felony that applies to individual players. Hawaii similarly prohibits all gambling forms. For residents of most other unregulated states, using an offshore sportsbook carries no defined criminal exposure, but also no regulatory protections.
If you want current odds, legal platform recommendations, and state-specific betting guides, Smart Bet Insider covers the full US betting landscape with up-to-date information for every legal market.
Frequently Asked Questions
How many states have legal sports betting in 2026?
Sports betting is live in 39 states plus Washington D.C. and Puerto Rico as of May 2026. Missouri became the 39th state when it launched on December 1, 2025. Wisconsin signed online betting into law on April 9, 2026, but has not yet launched operations. Eleven states have no legal sports betting of any kind, including California, Texas, Georgia, Minnesota, and Utah.
What is happening with sports betting in Illinois in 2026?
Illinois is the most contested regulated market in the country. The state’s progressive tax structure pushed the largest operators to a 40% rate, and a per-wager fee introduced in 2025 caused a 15% drop in total wagers placed. Chicago added its own 10.25% city tax effective January 1, 2026, which the Sports Betting Alliance is challenging in court. A bill to repeal the per-wager fee entirely was introduced in February 2026 and remains active in the legislature.
When did Missouri launch sports betting?
Missouri voters approved sports betting via Amendment 2 in November 2024. The Missouri Gaming Commission established regulations and licensing procedures through 2025, and nine sportsbooks launched simultaneously on December 1, 2025, making Missouri the 39th legal market in the US.
Which states are closest to legalizing sports betting?
Georgia and Minnesota are the two most active candidates entering 2026. Georgia’s HB 910 would authorize mobile betting under the state lottery without a constitutional amendment. Minnesota has passed legislation but has not launched due to tribal-commercial disputes that the 2025-26 session may resolve. Wisconsin signed its law on April 9, 2026, but commercial operators are excluded from the market under a tribal-exclusivity model.
What is the federal sports betting tax change in 2026?
Congress passed the One Big Beautiful Bill Act in 2025, which caps federal deductions for gambling losses at 90% of total losses, effective January 1, 2026. Previously, bettors could deduct the full amount of gambling losses up to the amount of their winnings. The change primarily affects professional and high-volume bettors but creates new tax considerations for recreational gamblers who itemize deductions.