United States Sports Betting

admin 4/10/2022

United States Legal Sports Betting
United States Sports Betting Laws

Sports betting laws in the United States are changing rapidly. While wagering on sports has long been an American tradition, many folks have been under the impression that the activity is largely against the law. Well, that used to be true; however, on May 14, 2018, the US Supreme Court overturned the Professional and Amateur Sports Protection Act (PASPA, 1992), lifting the ban on states being able to establish their own sports wagering industries. No longer does Nevada (primarily Las Vegas) have a monopoly on legal sports betting in the country and states are finally free to set up their own betting rules and regulations. Many already have.

Despite these positive developments, there are still federal laws on the book regarding sports wagering. The Interstate Wire Act of 1961 and the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006 both remain in effect. Both are limited in their application to gambling operators physically located within the United States, so bettors are still able to freely gamble despite those laws. As sports betting continues to become a more widely accepted in American culture, these laws will undoubtedly evolve, and they will likely eventually be repealed. Although no American laws prevent you from gambling, it would still benefit you to learn about them. Information is power, after all.

Sports betting is officially being rolled out across the United States, with nine states having legal online sportsbooks taking bets. Many more US states have legislation in the works to regulate online sports betting. Welcome to BettingPlanet.com’s guide to sports betting in the USA, which includes the top betting sites for each state, a run. United States Sports Betting As long as there has been the United States, there has been betting in the United States. In fact, the Revolutionary War was partially funded with a lottery. Sports Betting Laws In The United States Sports betting laws in the United States are changing rapidly. While wagering on sports has long been an American tradition, many folks have been under the impression that the activity is largely against the law. At the time the bill was passed, there were sports lotteries in Delaware, Montana, and Oregon, as well as licensed and regulated sports betting in Nevada, so those four states were exempt. The law effectively prevented the expansion of the sports betting market throughout the United States in what many categorized as a discriminatory law that.

PASPA – The Professional and Amateur Sports Protection Act

PASPA, the Professional and Amateur Sports Protection Act, was passed in 1992 and went into effect on January 1, 1993. This law, since its inception to its ultimate SCOTUS overturn, has long been the sole real hurdle for eager American sports bettors. In practice, PASPA essentially allowed Nevada to have a total monopoly on single-game sports betting (aka full-service sports betting or “Vegas-style” sports betting). Given the overwhelming popularity of sports betting in the US, PASPA was a financial catastrophe. Not only did the law basically bankrupt major casino districts like those in Atlantic City, NJ, and Biloxi, MS, PASPA actually cost the government (both state and federal) an estimated $400-500 billion a year in taxable expenditure. It is not a stretch to suggest that during the law’s existence (1992-2018), PASPA has cost the state hundreds of billions of dollars (if not trillions of dollars) in potential tax revenue. Of all the sports betting laws in the United States throughout its history, PASPA was by far the biggest, most obvious mistake.

During PASPA’s reign, Nevada – the only legal bastion for real sports wagering – was estimated to receive only 1-3% of the total sports betting handle turned by US bettors. The rest of that action was either going underground or being sent to offshore sportsbooks (which, despite PASPA and other US anti-gambling laws, were and are able to operate legally, as they are based overseas and outside of US jurisdiction). Naturally, PASPA has been something of a massive financial boondoggle for the US, and now that the law is overturned, there is hope that much of that action being sent overseas can be recovered and kept in the US economy. As for the lingering effects of PASPA? Good riddance to bad rubbish!

Read Our Article: What Is Papsa?

UIGEA – Unlawful Internet Gambling Enforcement Act

The Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) was written to deter US financial institutions from processing payments related to Internet gambling. Included in the SAFE Port Act 2006, the UIGEA is a provision that requires banks and other payment processors to monitor designated payment systems such as cards, checks, and bank wires for “restricted transactions”, While the UIGEA will make it more difficult when using your Visa or MasterCard to make a deposit at an online sportsbook, there are certain sites that have higher success rates than others. Like most federal sports betting laws, the UIGEA only applies to businesses and not the individuals placing bets.

While the UIGEA sounds scary and intimidating, it doesn’t actually do much to stop “unlawful Internet gambling”. That’s probably because most of the gambling it actually addresses isn’t unlawful in the first place, given that offshore sportsbooks accessible over the Internet do not constitute illegal bookmakers. The law is further neutered by the advent of Bitcoin and other cryptocurrencies, which allow bettors to fund their accounts and receive payouts without ever going through a banking service on either end. All in all, the UIGEA is the poster child for ineffective legislation to address nonexistent problems. Hopefully, the law will be eradicated in due time, but until then, if you ever have a card declined while trying to fund your sports betting account, simply wait a bit and try again, use a different card (like an Internet Visa prepaid/gift card), or just use Bitcoin or another supported altcoin. Indeed, there is some debate about the origin of Bitcoin itself, with many analysts claiming that the catalysts for its creation were the strict sports betting laws in the United States.

Read Our Article: What Is The UIGEA

RAWA – The Restoration of America’s Wire Act

The Restoration of America’s Wire Act, or RAWA, was designed to strengthen and broaden the Wire Act after the DOJ ruled in 2011 that the law only applied to sports betting. While this received some notable support in the legislature after its initial proposal in 2014 (co-sponsored by Republican Senator Lindsey Graham and Utah representative Jason Chaffetz), the bill gained no support and never advanced.

The necessity for RAWA, in effect, at least temporarily obviated when the DOJ, in 2018, reversed course, stating that the original Wire Act did indeed apply to all common forms of gambling. This, it seems, has deprioritized the issue, albeit a DOJ statement is not nearly as binding as an official law (and, as shown, can be reversed at any time). Lobbyist and casino magnate Sheldon Adelson was the main driving force behind RAWA, as online gambling threatens his land-based casino interests.

The Interstate Wire Act

The Interstate Wire Act (also called the Federal Wire Act, the Interstate Anti-Crime Act, or simply the Wire Act) was a piece of legislation signed into law in 1961 by former president John F. Kennedy at the behest of his brother Robert F., who was the US Attorney General at the time. Sold to the public as a means to stop the proliferation of mafia-related numbers rackets across state borders, the real impetus for the very first of the US sports betting laws was to stop sports gambling and underground lotteries from competing with state-sanctioned lotteries. Naturally, the states could not abide competition in this arena, as their own lotteries provided huge amounts of income to fund their programs and schemes.

The way that the Wire Act seeks to curb unlawful interstate gaming is to make it illegal to use wire communications (hence the law’s name) to accept sports wagers or other kinds of bets over things like telephones and telegraph systems. Indeed, semaphore is even outlawed! Naturally, with the advent of the Internet, this new communications form, traveling over wires, was also covered by the Wire Act, as is wireless wagering in our modern times. In 2011, the US DOJ stated that the Wire Act applied only to sports wagering. However, in 2018, the same US DOJ stated that the Wire Act does in fact apply to other forms of gambling, as well.

The only real effect of the Wire Act now, however, is that it prevents residents in one state from picking up the phone or logging onto the Internet to place a sports bet in another state. This is called geo-fencing, and even the casino and sports betting apps in Nevada are bound by GPS to only allow those physically in the state to place wagers. This problem, of course, doesn’t exist with legal offshore sportsbooks, as they operate entirely outside of the reach of US laws, and the Wire Act conveniently applies only to bookies, not individual bettors. That’s why these overseas books exist and continue to thrive.

Read Our Article: What Is The Wire Act?

Proposed Federal Gambling Laws

There is one particular sports betting law that is in the works, although it has not been officially filed as of yet. Back in September of 2019, US Senators Chuck Schumer and Mitt Romney began working on a form of legislation with the goal to create federal standards or guidelines for states who plan to regulate sports betting in the future. Currently, in the US, sports betting is handled on a state by state basis, making the rules vary drastically from one state to another. The proposed bill would make a unified sports betting set of rules that any state who regulates sports betting would then follow. Schumer initially tried to create a similar sports betting law earlier in the year but was ultimately a waste as the bill went nowhere. This newer proposed bill has more potential going forward, however.

Potential For Similar Laws In The Future

Will there ever be a PASPA style law passed in the future within the United States? The likeliest of answers is no. The US has lived both in a PASPA world and a post-PASPA world and the economy has thrived in one more than it has in the other. Sports betting will always be something that Americans participate in. To ban it would only be hurting the country and the revenue it gains from the industry. It wouldn’t hurt the consumer as there are outside outlets to gamble are sporting events that are completely legal.

The only difference if another ban were to occur would be the US not profiting from those outlets the way they do in a post-PASPA world with their own platforms, which is why it would be highly unlikely that any legislation would pass like that of PASPA in the future. That’s not to say that there won’t be proposals that will come along as some people will always be opposed to legal sports betting but to go as far as becoming a law again, a betting man would wager on the side of “No.” The legal sports wagering industry is just too lucrative in the US to ever be banned again.

GAME Act – Gaming Accountability and Modernization Enhancement Act

Introduced by Representative Frank Pallone, Jr. (D-NJ), the GAME Act was intended to effectively repeal and replace PASPA. Introduced in 2017 as HR 4530, the GAME Act sought to return to the states their rights to legislate their own sports betting rules. There were other considerations involved, namely a passage codifying daily fantasy sports (DFS) as “gambling,” which the DFS lobby is vehemently against. Needless to say, the Supreme Court overturn of PASPA temporarily derailed the GAME Act, though it may come about if the federal government wishes to regulate gaming nationwide. Hopefully, the states – which all now have total gambling sovereignty – will resist any efforts to bring sports betting back under the umbrella of the US government.

Read Our Article: What Is The GAME Act?

Sports Betting Laws By State

Most states (all of them except Nevada, Oregon, Montana, and Delaware) used to be bound by the same sports wagering prohibitions set forth by PASPA. However, now that each state is free to make its own rules for wagering on athletic contests, you can expect a host of divergent laws to apply, depending on where you are. Analyzing the sports betting laws by state is something that you will have to do if you plan on hitting the road to do some sports wagering in the future. But that’s OK, because – while the laws might vary a bit – all the states with sports betting (or those pending sports betting legislation) will generally follow the same mold. In most cases, you can expect the legal minimum age to bet on sports at these venues to be 21, and you can expect land-based wagering to launch before Internet sports betting follows suit.

If you don’t want to do the research and just want to get to the bets, however, you should use a legal offshore sportsbook. These sites operate in all 50 states (with very limited exceptions, in the case of Bovada), and they’re as good as or better than any land-based venue you’re likely to come across. Really, the only reason to bet on sports at a brick-and-mortar book is to soak up the ritzy atmosphere of the casino and to watch the games in its sports betting lounge. If you simply want to wager and get on with your day (or night), then don’t worry about any sports betting laws in the United States and simply sign up at an overseas Internet sportsbook.

States With Legal Sports Betting (Land-Based)

Nevada
Delaware
New Jersey
Mississippi
West Virginia
Pennsylvania
Rhode Island
New Mexico
Arkansas
New York
Iowa
Oregon
Indiana
Illinois
Montana
Michigan
Colorado (pending)
New Hampshire (pending)
North Carolina (pending)
Connecticut (pending)
Washington DC (Pending)
Washington (Pending)

States With Legal Sports Betting (Online)

Nevada
New Jersey
Pennsylvania
Iowa
Oregon
Indiana
Rhode Island
New Hampshire
Colorado
Illinois (pending)
Delaware (pending)
Tennessee (pending)
Michigan (pending)

States Currently Considering Sports Betting Legalization

Alabama
Arizona
Kansas*
Kentucky
Louisiana
Maine
Maryland*
Massachusetts*
Missouri
Ohio*
South Dakota*
Virginia*

* States that gave legal sports betting a serious consideration and are expected to be the next wave of sports betting legalization.

When discussing legal online sports betting, the majority of America's government has a very regressive, prohibition-style attitude towards it, buying into a negative perspective concerning the morality of gambling entertainment. This is what has led to a variety of state gambling laws in the past.

There are no US federal laws that make it a crime for Americans to place bets at offshore sportsbooks that are operating legally within the industry. There are two states that legally prohibit all online gambling, domestic or offshore, leaving residents in Connecticut and Washington without legally sanctioned online betting options, though they have yet to start enforcing those restrictions.

For the most part, state lawmakers are becoming more progressive concerning betting entertainment and recognize the value that this type of revenue stream can bring to a state. Individual states are actively analyzing what the legalization of domestic sports gambling can provide them with in terms of opportunities, tourism, and tax revenue, and many have already taken action one way or the other through new legislation.

Iowa, Nevada, New Jersey, Oregon, Pennsylvania, Rhode Island, and West Virginia currently permit state-regulated online sports gambling, with nearly two dozen additional states having launched land-based sportsbooks. Individual territories began embracing sports betting the moment that PASPA was ruled unconstitutional by the Supreme Court in the infamous NJ case, with multiple states having had their legislation ready and waiting should the ruling go in the Garden State's favor.

Below we'll take a look at the relevant US federal gambling laws, and explain how state gambling laws intersect with federal laws to impact online and brick and mortar sportsbook gambling, as well as what these laws have to say about the legal status of offshore sports betting entertainment.

The Federal Laws on the Books

The sections below will detail and explain how each major federal law affects domestic gambling opportunities in the US.

The Federal Wire Act

Passed back in 1961, the Federal Wire Act was made law in an effort to curtail the illegal gambling activities taking place over the phone by organized crime syndicates. It prohibited the transmission of wagers or betting information from being carried across state lines via telegraph or telephone. The Federal Wire Act targeted these illegal bookie operations as a means to curb the mafia from manipulating games and making a profit through these tactics.

This law was strictly focused on interstate gambling, and only targeted those accepting bets and not the individuals placing the bets. The goal was to crack down on illegal gambling services, not prosecute bettors. Between the DOJ Legal Opinion of 2011 and the repeal of PASPA, today's application of the Wire Act prohibits any gambling business from accepting bets across state lines or from foreign sources.

With the changes still being implemented, we are not sure yet how this will affect those states that had entered into interstate gambling pacts with one another, sharing player pools for their online gambling initiatives. Once that aspect of the legal situation becomes more clear we will update that information here.

United States Legal Sports Betting

The Professional and Amateur Sports Protection Act

Also known as the Bradley Act, or just PASPA, the Professional and Amateur Sports Protection Act was a sweeping federal regulation that passed in 1992, with the supposed intent of protecting the integrity of sports by making sports betting illegal.

At the time the bill was passed, there were sports lotteries in Delaware, Montana, and Oregon, as well as licensed and regulated sports betting in Nevada, so those four states were exempt.

The law effectively prevented the expansion of the sports betting market throughout the United States in what many categorized as a discriminatory law that favored a few states while restricting others.

New Jersey took on the mission of challenging the law and after several years of court battles, was given a favorable outcome by the highest court in the land as SCOTUS ruled PASPA as unconstitutional, nullifying the law.

As of May 14, 2018, each individual state now has the authority to dictate sports betting laws within their borders. They can now choose to authorize or prohibit sports betting at their pleasure. Following PASPA's repeal, we have seen multiple states move forward with legislation that legalizes sports gambling at the state level.

The Unlawful Internet Gambling Enforcement Act

This is the big one that shook the gambling industry to its core. Online gambling really started to explode during the early 2000's, especially in the realm of online poker. In 2006, then-President Bush signed into law the Unlawful Internet Gambling Enforcement Act, known all over as the UIGEA. In a nutshell, the UIGEA placed very stringent regulatory restrictions concerning how gambling-related transactions could be processed.

The most reputable sites started a countdown and allowed Americans to withdraw and closeout their accounts. Many trusted gambling sites left the US market at this time. After the dust settled, and the financial and gambling industries learned how to comply with the regulatory oversight provided by the UIGEA, many of these reputable gambling sites have returned to provide services to US sports bettors.

The UIGEA did end up making the online gambling market safer for both the bettors and the operators by imposing a more reliable and stricter regulatory structure for how gambling-related transactions are processed. Gambling sites invested in top tier payment processors while all parties implemented higher-level security protocols to ensure the validity and safety of those transactions that are processed.

While US online gambling funding options are still somewhat limited in some regards, things have stabilized. The emergence of cryptocurrencies have filled the void left by the elimination of US-friendly e-wallets and failed credit card transactions. The UIGEA does not make it illegal for Americans to gamble online. The law simply regulates how online gambling transactions are processed.

The 2011 Department of Justice's Interpretation of Federal Laws

With the growth of online commerce, several states became interested in offering lottery game services online. This raised questions concerning the application of the Federal Wire Act, driving the DOJ to issue a clarification of the law's reach.

The Department of Justice ruled, and accurately so, that the federal government had no right to tell states that they could not sanction online gambling and therefore established that each US state has the authority to determine their own fate concerning online gambling with the exception of sports betting.

The repeal of PASPA took care of freeing sports gambling as the last remaining federally prohibited form of state-regulated online gambling. As of now, all 50 states have the legal ability to legalize and offer online gambling such as casinos, poker, bingo, and sports wagering. To date, only a handful of states have taken advantage of legal domestic online gambling. However, many states have pending bills to allow various forms of sports betting.

The 2019 DOJ Interpretation of Federal Gambling Laws

Following the repeal of PASPA in 2018, the reach of the Federal Wire Act has again come into question. In a new interpretation, which many believe was coerced by anti-online gambling activist Sheldon Adelson, the Department of Justice has indicated that the Wire Act prohibits not only interstate wagers but also the sharing of information across state lines.

This determination will certainly harm those states that have entered into interstate gambling compacts to share player pools and resources with other states. The opinion is being formally challenged through a lawsuit headed up by New Hampshire. As the situation unfolds, we will provide updates here.

What You Need to Know Going Forward

All of this legal information is good knowledge to have under your belt, no doubt about it. However, all you really need to know going forward is that there are no federal laws making gambling illegal in the United States either online or offline, and this includes domestic and offshore sports betting. States now determine the legal status of all gambling entertainment within their borders. As a sports betting resource guide, we want to make this point clear.