Is Betting Online Legal In United States?

Note: we are not lawyers and this page is not legal advice. This content is solely for information purposes only. If you need clarification, consult an attorney before making any decisions on how to proceed.

Is Betting Online Legal In United States?

On a Federal level, Yes. At this point, you need to know your state laws. The legality of online betting depends on what state you live in. There is no longer a federal ban on legalized sports betting due to the Supreme Court ruling in May 2018. However, each state must craft and pass its own regulatory laws. This has already happened in New Jersey, Nevada, Delaware, Mississippi and West Virginia with a few more states (Pennsylvania, Michigan, Rhode Island) seemingly on the way. Online Sports Betting is only legal in New Jersey & Nevada. You must meet particular age and location requirements in each state to participate. Below is a table breaking down the progress and status of each state.

In What States is Online Sports Betting Currently Legal?

• Nevada – Legal and Available
New Jersey – Legal and Available
Delaware – Legal and Available
Pennsylvania – Legal, but No Products Yet
West Virginia – Legal, but No Products Yet

So far, Pennsylvania, Mississippi, New Jersey, and West Virginia have joined the ranks of Nevada, Oregon, and Delaware to make sports betting legal. Even in those states where betting was previously legal, the repeal of PAPSA is allowing them to expand what kinds of bets can be made and bring in additional revenue.

The following states are considered to be coming in the near future: Michigan, Mississippi, Oregon, Rhode Island, New York and while it’s going to take a lot of work, being an optimistic Californian, I’m hopeful California is on the shortlist (legislation has been introduced, but it didn’t gain any traction). It’s difficult to predict exact timing as there are a number of economical and social factors at the time of bill creation/review that can play into each state decision.

In What States is Online Casino Betting Currently Legal?

• Nevada – Legal and Available (Casino & Poker)
New Jersey – Legal and Available
• Delaware – Legal and Available
Pennsylvania – Legal, but No Products Yet
West Virginia – Legal, but No Products Yet

In What States is Online Poker Legal?

• Nevada
• New Jersey

Two states currently offer online poker and WSOP.com is considered to be the gold standard in both.

Legal Status of Betting in all 50 States

StateOnline BettingOnline CasinoSports BettingOnline Sports BettingOnline PokerOnline LotteryDaily Fantasy Sports
AlabamaNNNNNNN
AlaskaNNNNNNY
ArizonaNNNNNNN
ArkansasNNNNNNY
CaliforniaNNNNNNY
Colorado NNNNNNY
ConnecticutNNNNNNY
Delaware YYYNYNY
FloridaNNNNNNY
GeorgiaYNNNNYY
HawaiiNNNNNNN
IdahoNNNNNNN
IllinoisYNNNNYY
IndianaNNNNNNY
IowaNNNNNNN
KansasNNNNNNY
KentuckyYNNNNYY
LouisianaNNNNNNN
MaineNNNNNNY
MarylandNNNNNNY
MassachusettsNNNNNNY
MichiganYNNNNYY
MinnesotaNNNNNNY
MississippiYNYNNNY
MissouriNNNNNNY
MontanaNNNNNNN
NebraskaNNNNNNY
NevadaYNYYYNN
New HampshireYNNNNYY
New JerseyYYYYYNY
New MexicoNNNNNNY
New YorkNNNNNNY
North CarolinaNNNNNNY
North DakotaNNNNNNY
OhioNNNNNNY
OklahomaNNNNNNY
OregonNNNNNNY
PennsylvaniaYYNNYYY
Rhode IslandNNNNNNY
South CarolinaNNNNNNY
South DakotaNNNNNNY
TennesseeNNNNNNY
TexasNNNNNNY
UtahNNNNNNY
VermontNNNNNNY
VirginiaNNNNNNY
WashingtonNNNNNNN
West VirginiaNNNNNNY
WisconsinNNNNNNY
WyomingNNNNNNY

Supreme Court Laws & Ruling on Sports Gambling

The Professional and Amateur Sports Protection Act, better known as PASPA, became Federal Law in 1992. President George H.W. Bush signed the legislation, which was drafted when gambling legalization began making inroads into sports betting. Several national and college-level sporting organizations opposed the idea of legalized sports gambling because they were concerned that it might endanger the integrity of their players.

Sports betting was already illegal, but PAPSA took the issue one step farther and prohibited states from regulating and taxing sports betting. It also gave the Attorney General and professional and collegiate sports associations the power to bring a civil action against sports betting schemes.

It remained as law until New Jersey, which had previously been grandfathered in with legal sports better but later repealed their statues, decided to re-authorize sports better. The decision sparked a legal battle that went all the way to the Supreme Court.

On May 14, 2018, the U.S Supreme Court rendered its decision in the case of Murphy et. al. v National Collegiate Athletic Assn. et al. regarding this dispute.

The catalyst of New Jersey’s court battle to legalize sports gambling in their state came about when state voters passed a constitutional amendment authorizing the state legislature to legalize sports gambling schemes at Atlantic City. Atlantic City has long been a haven of gambling and horse racing along the Jersey shore and at other horse racing tracks.

The New Jersey State legislature acted upon that authority and enacted a 2012 law to legalize those forms of sports betting. Under the PAPSA law, the NCAA and professional sports leagues had the ability to bring a civil action against New Jersey for legalizing sports gambling and they did so. That court battled ended in victory for the sports leagues when the Supreme Court denied review.

In 2014, the New Jersey legislature tried again. This time, instead of authorizing sports betting in Atlantic City and other horse racing tracks, they repealed the state laws barring persons over 21 from wagering on sports events, horse races, and collegiate-level sporting events not involving New Jersey schools or taking place in New Jersey. The same defendants went back to court, arguing that New Jersey was still violating the PAPSA laws.

The question in the Supreme Court came down to whether or not the federal government had the authority to force states to act as its own regulatory agency prohibiting state gambling. The final 6-3 vote ruled that PAPSA was unconstitutional, which then freed states to regulate sports betting going on within their borders.

PAPSA was the primary federal law regulating sports betting at the state level since it was passed by Congress in 1992 and signed by then-President George H.W. Bush. Now, in the absence of any federal law prohibiting the regulation or taxation of sports gambling at the state level, states are free to pursue their own sets of regulations.

Will the Federal Government Enact New Federal Sports Betting Laws?

It’s possible that in the future Congress will write and pass a new law that passes Constitutional muster as defined the May 2018 court decision. If it does, then a new regulatory framework will replace the PAPSA framework and the state laws would no longer be the determining factor.

Orrin Hatch, who helped to write the 1992 law, has already expressed his wish to replace it and prevent a patchwork, state-by-state regulatory model for sports gambling. However, he is retiring next year, and a new law does not appear to be a major legislative priority for the Republican party, which currently controls both the House and the Senate.

The only proposed new law, by Frank Pallone (D-NJ), is the Gaming Accountability and Modernization Enhancement (GAME) Act, which stalled outside of committee. It is unlikely that Congress will do much until after the states have had a chance to pass their own regulations and test them out for a few years.

What States are Moving Towards Betting Regulation?

Prior to the ruling, only Nevada allowed sports gambling on the outcome of single games, and that hasn’t changed. Montana, Delaware, and Oregon also allowed it on some level, such as fantasy sporting events. Sports betting was illegal in all other states, although some had provisions that would legalize it upon the overturn of PAPSA.

Pennsylvania and West Virginia were quick to authorize regulated sports better after the law was overturned. Mississippi promoted rules regarding sports gambling within a few days and had actually repealed the ban on sports betting outside casinos quietly a few months earlier, to sidestep legal issues with fantasy sports. Wagering in New Jersey began in June as soon as the legal issues were wrapped up, although they were actually a week behind Delaware’s shift from multi-game to single-game betting.

California is also making plans to legalize sports betting, but there are some questions of how that will work with the tribal casinos, which have exclusive gaming rights in the state. It’s estimated that within five years, thirty-two states will have some type of legalized sports gambling.

What States are Most Likely to Enact Online State Betting Regulation?

Not all states are equally enthusiastic about the change, and alterations may happen more slowly in some than in others. Alabama, Colorado, Idaho, South Carolina, and Wisconsin all have constitutional prohibitions on sports gambling which would need to be overturned before it can be legalized in those states.

The Supreme Court decision came at the end of many state’s legislative sessions, so many have done very little to change any laws that are on their books. Other states, especially those where all gambling takes place, by law, on tribal land, will need to negotiate with the Native American tribes before they can expand sports gambling or find a way to incorporate it into existing casinos.

There are also political pressures against it. Some state politicians have expressed support for the Supreme Court decision as a means of backing state’s rights but are hesitant to expand gambling within their borders.

Some of that has to do with sports betting’s reputation. It is often considered to be very addictive, especially for young people. Historically, there have been times, such as the infamous 1919 World Series, where sports betting impacted the outcome of major sporting events and discredited the game itself.

Many of the states that have legalized or are planning on legalizing sports betting have not allowed betting on games closely linked with their own state, and that trend could easily continue as new states research and draft laws on their own. Some states, such as Tennessee, have proposed laws that would fund K-12 education with the proceeds.

With the recent repeal, entities can now start up with licenses in states where sports betting is newly legal. Since regulation is happening on the state level, the costs of doing business will shift from state to state. Pennsylvania was one of the very first states to authorize sports betting but experts have pointed to the high start-up costs – a 10 million dollar licensing fee and 34 percent tax rate – as discouraging for new sports betting operators.

Sports betting may not even be limited to state boundaries, although the future of mobile and online sports betting remains to be seen. Online fantasy sports leagues are big business and have skirted the PAPSA laws outlawing sports betting for years. Without that law, the leagues will be free to adjust payouts and expand throughout the country.

How are Professional Sports Leagues Reacting?

Despite being on the other side of the court battle, professional sports leagues and collegiate sports have accepted that the law has changed and that sports betting will now be regulated at the state, not the federal, level.

The NBA and the MLB have proposed a pre-tax one percent “Sports Integrity Fee” to police points shaving and other unethical actions. Betting operators have opposed the fee, and it is unlikely to be popular with state legislators either since it would cut into the state’s profits.

Their main concern, aside from the money, appears to be in keeping their sports events fair and open-handed, without the scandals that used to plague sports teams when betting occurred.

  
Sam Shefrin is the founder of Lineups.com, Inc. He started Daily Fantasy Cafe, Inc. in 2014 and before that SEO Services Los Angeles, Inc. Armed with a passion for sports and every Atlanta team, the journey continues. He has been quoted on Forbes.com for industry insight and his websites featured on NBATV, Yahoo! Sports, Fantasy Pros, Bleacher Report and SB Nation.