That’s now changing state-by-state, and a domino effect is expected to soon take hold.

This year, three states legalized some form of online gambling within their borders, with New Jersey recently joining Nevada and Delaware to allow live Internet-based casinos.

Quietly, Colorado lawmakers and industry officials drafted legislation late last session to authorize Internet poker. Though that effort stalled, the industry says it will continue to explore the issue, with another push possible in 2014.

“This is something we are monitoring very closely,” said Troy Stremming, executive vice president of government relations for Pinnacle Entertainment, owner of Colorado’s largest casino, Ameristar Black Hawk.

“With respect to Colorado, when there is a piece of legislation to review, we can make decisions based on whether or not participation will be beneficial to the company,” he said.

Online gambling in Nevada, New Jersey and Delaware is limited to players who are physically within the respective state’s borders. Nevada has authorized Internet poker, while New Jersey and Delaware permit other online casino games such as slots.

Colorado is closely watching Nevada’s process.

Adam Krejcik, managing director of digital and interactive gaming at Eilers Research, estimates that online poker in Colorado could generate $30.4 million to $37.8 million in annual revenue about three to five years after legislation has been enacted.

Krejcik’s forecast for Colorado’s online casino revenue, which covers poker as well as slots, blackjack and other games, is $112.5 million annually.

For reference, Colorado’s brick-and-mortar casinos generated adjusted gross proceeds – total bets minus payouts – of $761 million during the fiscal year that ended in June.

In Nevada, the two poker sites that are live aren’t doing as well as expected, in large part because of the smaller player pool, said Donnie Peters, editor in chief of PokerNews.com, which tracks the industry.

Before the federal government cracked down on online poker more than two years ago and shuttered three popular offshore sites, the player pools on those sites covered millions of gamblers worldwide.

Black Hawk, Colorado’s largest gambling destination, commissioned a statewide poll this summer to gauge voter interest in expanding betting to the Internet.

“Our survey showed that the voters of the state did not have much appetite for online gambling,” said Black Hawk city manager Jack Lewis.

Rep. Kevin Priola, R-Adams County, said he was among a group of bipartisan lawmakers who took up the issue last session.

“My thought and some others’ thoughts were, ‘Let’s have Colorado as close to the starting line as we can possibly be because as soon as the gates open, I think there are only going to be a few states that are going to have enough scale to make it work,’” Priola said.

Industry observers believe California will be the next state to permit Internet gambling. Federal lawmakers are considering a bill to authorize online poker nationwide.