New Jersey Governor Chris Christie this week finally approved online gaming in the Garden State. Now comes the hard part: banding together with other states to attract more gamblers, drive up jackpots and lure players away from offshore websites.

New Jersey is now the third state to approve online gambling, after Nevada and Delaware. The catch, however, is that the new laws apply only to people physically present in the individual states.

Several other states, including Massachusetts, California, Hawaii, Illinois, Iowa and Mississippi, are weighing some kind of online gambling legislation. If they want to offer the big jackpots that attract scores of players, they are likely to look outside their borders to combine gaming offerings and set regulations, much as they have with multi-state lottery drawings like Powerball and Mega Millions.

“I would be shocked if within a few years there aren’t multiple states cooperating,” said Tom Goldstein, an attorney who has represented online gaming companies. Once that happens, Goldstein expects a “steamroller effect where a state legislature says ‘Why are we passing up on tens of millions of tax revenue every year?”

According to American Gaming Association, about 85 countries have legalized online gambling, and an estimated $35 billion is bet online worldwide each year, including millions of people in the United States through offshore websites. Every state except Hawaii and Utah collects some kind of revenue from lotteries, casinos or other types of wagering. States received an estimated $7.5 billion in direct gaming revenue in 2011 on a fiscal year basis through licensing fees, taxes and other allocations, according to Fitch Ratings.

The U.S. government has long considered online wagering illegal, but the Department of Justice in late 2011 clarified its stance, paving the way for states to unilaterally legalize some forms of online gambling.

A state’s population is a key factor for the new gaming programs. With just 2.7 million residents, Nevada could have trouble attracting enough in-state players to its online poker games to offer a range of limits, or the minimum and maximum amounts a player can wager on one bet. Without a wide range of active games, states could lose business to the unregulated offshore sites that dominate the market currently.

“There’s going to be intense competition for customers,” Michael Paladino, a Fitch Ratings senior director, said.