Gambling, including on sports, was legal in Nevada and the bars could, if they chose, stay open 24/7. Most counties except Washoe (Reno) and Clark (Las Vegas) had legal brothels, some still do. Instant marriages and quickie 6-week divorces were a Nevada speciality. None of that was true in the adjacent states or indeed anywhere else in the nation.
The other states tolerated Nevada's libertarian policies and even benefitted from them to some extent. Having these "services" available in Nevada reduced the pressure demand would have exerted to have these same things legally available at home. Now many states have some of what Nevada had back then, except the legal brothels and permissive liquor laws.
Agitation to force Nevada to conform to the policies in effect in most states was not effective. It wasn't until the Indian casino movement happened that most other states got gambling.
My point from this is that the nation tolerated outlier Nevada having laws and policies quite different than other states for several decades. If red states want to have different policies than blue states, why couldn't that work as well.
As we Californians once did in Nevada, red state denizens seeking something not available at home (e.g., abortion) could visit or move to a nearby blue state. Conversely, blue state denizens wanting to own and carry a gun could move to a red state.
With "state option" people could choose to live in a state with laws they find reasonable. They could still visit or vacation in states with different laws so long as they obeyed those while there.
Afterthought: There is a good science fiction/future history novel (or series) in the idea of extreme federalism, where states have very different laws and consequently extremely different lifestyles. I offer it free to whoever has the energy and imagination to write it. It should be fun both to write and to read.
