Sports Betting Online is Legal In US (State Tracker Guide 2020)

States Leading the US Sport Betting Market

Pennsylvania

Pennsylvania
Sports betting is legal in PA and mobile apps are available on iOS & Android. Lineups has exclusive PA welcome bonus offers.

New Jersey

New Jersey
Sports Betting is live and legal in New Jersey. Lineups has in-depth reviews and the highest sign up bonuses for the top NJ Sportsbooks.

Illiniois

Illinois
Illinois mobile sports betting went live in August 2020. Lineups has the max free bonuses from the best IL Apps.

Iowa

Iowa
Iowa sports betting is live. Lineups has exclusive free bet promo codes for the best IA betting sites.

Colorado

Colorado
Sports betting is legal in CO and the top sportsbook apps are ready for download. Lineups has the highest CO bonuses.

Indiana

Indiana
Sports Betting is live and legal in Indiana Lineups has reviews and the highest sign up bonuses for the IN betting apps.

FanDuel Sportsbook & DraftKings Sportsbook Leading the US Betting Market

For nearly a decade, these two companies have been competing for the US sports betting market. Lineups.com has been a partner of both companies offering the best bonuses along the way. The Lineups.com DraftKings Sportsbook promo code provides new players with $1,000 in bonuses. DraftKings was the first company to produce a mobile sports app that was played with actual currency. The brand has a well-established user base, and is officially launching its first Sportsbook before football season. The project’s lead, Dan Hannigan-Daley, expresses optimism, saying that “75% of our users are already betting on sports in some capacity.” DraftKings opened with a top of the line new user welcome bonus.

The company’s mobile app was the first in New Jersey in partnership with Atlantic City’s Resorts Casino. Bets must be placed within the state’s borders, but the DraftKings sportsbook is not tied to any specific physical location. DraftKings Sportsbook was late to the Pennsylvania party, and it cost them early on. FanDuel Sportsbook launched first with a new user promotion that captivated PA bettors and allowed FanDuel to jump to the forefront of the revenue leaderboard.

Fanduel is the second-largest player in the US daily fantasy sports and sports betting market. Formed in 2009, the company has both the user base and technology to expand quickly into online sports betting. FanDuel opened its first sportsbook at the Meadowlands, NJ and has been competing ever since. FanDuel Sportsbook offers a FanDuel Sportsbook promo code that provides a risk-free bet of $500.

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Top Rated US Sportsbooks

States by State Sports Betting Tracker

Click on a state on the map below and you will be directed to a guide on the state’s legal sports betting status. Each state page contains legal updates, news and rankings of the top sportsbook apps. We also have the biggest signup bonuses at each sportsbook within each state.

*Green = Mobile & Desktop Sports Betting Available

AL AK AZ AR CA CO CT DE FL GA HI ID IL IN IA KS KY LA ME MD MA MI MN MS MO MT NE NV NH NJ NM NY NC ND OH OK OR PA RI SC SD TN TX UT VT VA WA WV WI WY DC

States with Legal Sports Betting

State
Legalized Sports Betting
Mobile Sports Betting Apps
Arkansas
Y
N
Arizona
N
N
Colorado
Y
Y
Delaware
Y
N
Illinois
Y
Y
Indiana
Y
Y
Iowa
Y
Y
Michigan
Y
N
Mississippi
Y
N
Montana
Y
N
Nevada
Y
Y
New Hampshire
Y
Y
New Jersey
Y
Y
New Mexico
Y
N
New York
Y
Y (Upstate Only)
North Carolina
Y
N
Oregon
Y
Y
Pennsylvania
Y
Y
Rhode Island
Y
N
West Virginia
Y
Y
Tennessee
Y
Y
Washington D.C.
Y
N
Washington
Y
N
Virginia
Y
Y

 

Each state has different laws and different sportsbooks. We’ve made the process easy for you with a state by state guide to legal sports betting in the US. Check if your state is online.

Pennsylvania

 

PA is one of the most active betting states in the US. Mobile sports betting is live as of the summer of 2019. Lineups Betting has complete news, reviews, and promotional coverage.

New Jersey

 

NJ led the charge on the Supreme Court and has been reaping the benefits. Being first to market in the Northeast has resulted in overachieving revenue. We have all the NJ news.

New York

 

NY has seen NJ flourish and should be coming online with some form of online sports betting in 2019. We’re following all the NY laws and legislation to provide the critical NY news.

California

 

California is the Holy Grail for online sportsbooks. There are some serious challenges in CA, primarily navigating the tribal casinos. We are following along with breaking CA news.

Michigan

 

Michigan could use some additional state revenue, and sports betting may be able to help. We’re following the state closely and have the information you need to bet safely.

Strategy

 

One of our missions is to help people make smarter bets. We have a qualified team of daily fantasy and sports bettors to help you learn some tips and find your winning formula.

Reviews

 

There are a lot of online sportsbook options, and the only way to navigate this crowded field is by doing the research. We’ve done it for you in easy to read reviews. Read before starting!

Promo Codes

 

New user bonuses, odds boosts, and daily promotions are all the norm in the sports betting world. We offer the highest bonuses guaranteed and will be your guide to free be

General US Sports Betting Question & Answer

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Frequently Asked Questions

When did sports betting become legal?

Sports betting in the United States became legal on May 14, 2018. On this date, the United States Supreme Court overturned the congressional law passed in 1992. It is now up to each state to decide whether sports betting is legal in their state.

Are sports betting winnings taxable?

On a federal level, all sports winnings are taxed at a rate of 25 percent of total winnings. Under the rules of the Internal Revenue Service, winnings from sports bets are grouped with gaming revenue and taxed at the same rate.

What are sports betting lines?

Sports betting lines are the probability odds assigned to a sporting contest. Various types of lines include the point spread, moneyline, and the over/under number for total points. Negative lines indicate the favored team, and positive numbers are assigned to the underdog.

Which sports betting app is the best?

Picking the best sports betting app should consider user preference and overall usability of the site. FanDuel has produced some astounding numbers on the overall handle, but DraftKings is routinely seen as the most user-friendly and widely used sportsbook app.

What is a teaser in sports betting?

Teasers are similar to a parlay bet in sports betting. The bettor can lower the risk of losing by adjusting the line or teasing on a two-team combination bet. While the chances of winning are better, there is a reduction in the odds they receive.

Can you bet on sports with PayPal?

The number of sportsbooks that accept deposits using PayPal is very limited. However, that is because PayPal has chosen to be selective in the sportsbooks it allows to use its services. The sites that accept PayPal will list it as an option and display the PayPal logo.

Is Bovada legal in the United States?

US federal law prohibits sports betting at offshore betting sites. Using an offshore sportsbook to gamble online is deemed a violation of the Wire Act. Some states have forced Internet providers to block offshore gambling vendors. You can get an account at Bovada, but it is not legal.

Latest Sports Betting News

Chicago Sports Betting: Guide to Sportsbooks in the Windy City
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Georgia Sports Betting Bill Heads to Senate Floor
Illinois Sports Betting: DraftKings & FanDuel Top Apps in Illinois
Virginia Legalizes Sports Betting: 2nd State in 2020

Contents

Status of Legal Sports Betting in US States

Gambling has been restricted in the United States from its founding, but we are in an era of change. The US Supreme Court removed a federally-imposed ban on state-sanctioned wagering earlier this year, and players are already seeing the effects.

Here is a roundup of developments by state:

Nevada

Nevada first offered sports gambling in 1949 and has been the only state to offer sports betting for many years legally. Despite losing its monopoly, the state retains a significant advantage. In terms of infrastructure, talent, and experience, Nevada is at the forefront of a newly-energized market.

New Jersey

New Jersey passed a referendum to legalize gambling in 2011 and removed its anti-gambling laws. The Supreme Court overturned restrictions, and New Jersey’s first legal wagers were made on June 14, 2018. Online sports betting was launched in July.

Pennsylvania

Pennsylvania is positioned to take advantage of the new environment and legalized sports betting in 2017. Casinos are allowed to use a temporary betting facility before becoming fully operational. The state’s law permits betting “by any system or method,” including the internet.

Mississippi

Moving quickly after the Court’s ruling, Mississippi is one of four states to offer legal sports betting. The state’s 2017 law changes to allow wagering cleared the path, making Mississippi is the first Southern state to take advantage of the new environment. Online wagering is currently limited to licensed facilities.

West Virginia

West Virginia legalized sports gambling in September 2018: the 5th state to join in. State laws enacted in March 2018 permit sports betting in West Virginia’s existing gambling facilities. Wagering by mobile device is also allowed.

Rhode Island

Rhode Island is expected to have legal sports betting by October 2018. Prior referendums authorized two casinos, and the state legislature moved earlier this year to permit sports betting formally. Wagering is limited to these two facilities, but state officials have expressed interest in eventual expansion online.

California
California has operating land-based casinos, but no sportsbooks. California will be the crowning glory in the legalization of online sportsbooks. The number of bettors and action is thought to exceed all other states. There has been legislation introduced for sports betting, but nothing has been passed yet.

Delaware
Delaware has legalized sports gambling and a number of land-based sportsbooks are currently operating. There are no mobile or online apps available yet.

States Where You Can Legally Bet on Sports (Land-Based & Online)

The only state with legal gambling for many years, Nevada is still the main player. There are a variety of legal offerings by land-based sportsbooks. Online wagering is available through mobile apps connected to those sites.

Delaware began regulated sports betting in June. The state began offering internet gambling in 2012, with three land-based casinos operating on the same platform. The existing casinos probably meet the state’s capacity, as Delaware is small and has less than a million residents. Delaware’s Gaming Enforcement does have discretion on internet offerings and has signaled a favorable outlook.

New Jersey began accepting wagers in June, and online sports betting started in July. There are currently eight land-based locations for sports betting in the state, with more expected soon. The first online betting app was DraftKings Sportsbook, which opened in early August 2018. See our DraftKings Sportsbook editor’s review page for full details. FanDuel Sportsbook was rolled out at the Meadowlands soon after. You can read our entire FanDuel Sportsbook review on Lineups Betting.

Mississippi began legal sports betting in August, and has five land-based casino locations. There are no provisions for online gambling beyond these sites, but more are expected to open.

West Virginia finalized regulations in August and began issuing licenses for sportsbooks inside existing casinos. Penn National at the Hollywood Casino was the first license awarded, and FanDuel Sportsbook is partnering with The Greenbrier. There is no online gambling in the state currently.

Pennsylvania has ramped up gambling options in recent years, and the state now has a land-based network of slots and 12 casinos—with another on the way in the Stadium District in Philadelphia. In October 2017, a significant gambling package was made law, which authorizes online sports betting and a host of other offerings.

After the Supreme Court’s ruling, Rhode Island established sportsbooks in their two operating casinos. These are expected to roll out in October 2018. Currently, there are no laws for online gambling: the focus is on getting sports betting in place for football season. The regulatory climate is favorable, however, and online sports betting is likely to follow.

Two states, Oregon and Montana, have had limited forms of gambling recently. The Oregon Lottery is likely to revive gambling operations, which were closed in 2007 for the NCAA. Montana allows limited gambling in licensed taverns, and proposals are being made for the state legislature next year.

Daily Fantasy Sports Sites Positioned Well

Two companies are well placed in the new environment for online sports betting: Boston-based DraftKings and FanDuel out of New York City. Both companies have built a user base through daily fantasy sports gaming, and are moving into relationships to bring legalized sports betting online.

FanDuel was bought by a European gaming company, Paddy Power Betfair, just after the Court’s favorable decision. This expands FanDuel’s reach and increases its financial holdings, allowing the brand to pay off its debts and prepare for future expansion. Several executives from previous daily fantasy operations helped start-up Monkey Knife Fight, which is a daily fantasy spin on prop games. Lineups has a full Monkey Knife Fight review & Monkey Knife Fight promo code with all the information you need to get started. It’s a website, unlike any other and may end up taking over the props space.

Laws that Led to This Point in Sports Betting History

Gambling has a checkered history in America. Early hotspots of wagering like New Orleans or the 1850’s Gold Rush San Francisco were stifled by concerned citizens, and gambling was prohibited in the country by the early 20th century.

In hopes of economic relief, Depression-era Nevada legalized gambling. After WWII, gambling prohibition strengthened across the country–and Nevada became an opportune investment.

The Interstate Wire Act was passed in 1961, which prohibited the use of wire communications to “assist in the placing of bets or wagers on any sporting event or contest.” The Act was intended to target organized crime, but its use was expanded.

The Seminole Indian tribe established a gambling facility in 1979—opening the door to a wave of casino operations on reservation lands.

The Professional and Amateur Sports Protection Act (PASPA), was enacted in 1992 to halt the advance of legalized sports betting. The law allowed some gambling locales to be grandfathered, including Nevada casinos and state-run lotteries in Oregon, Delaware, and Montana.

PASPA faced several legal challenges. The American Sports Betting Coalition, still going strong, was created as a pro-repeal initiative by Indian gaming interests and the American Gaming Association.

New Jersey voted out its anti-gambling laws in 2014, creating a challenge to the PASPA restrictions. Sports leagues and the NCAA filed suit against New Jersey’s actions, and the case was appealed to the Supreme Court.

On May 14, the Court decided PASPA was unconstitutional. The decision leaves the question of legalized sports betting to the states.

How Sentiment in the United States Has Evolved

Influence of Money

Gambling in America has historically gone through eras of sentiment. The mixed feelings of the average citizen are reflected in swings of public opinion, which have alternated between prohibitions of wagering and the relaxing of restrictions.

Economics is seen as an instigator of gambling’s fortunes—but it works both ways. Gambling flourishes in prosperous times as part of the enjoyment good times bring. Ironically the same enthusiasm for gambling can develop during bad times, too, in hopes, it might provide needed revenue.

From a citizen’s perspective, maneuvering by public officials seems motivated by the money which gambling represents. Prohibitions are seen as turf battles instead of true reflections of high-flown sentiments.

Involvement of Sports Leagues

After early scandals involving wagering, major sports leagues were seized with panic. In particular, the Black Sox scandal of 1919 caused such a furor in public confidence that a new commissioner was established—the first in organized sports—to make integrity the league’s top priority.

This attitude brought the leagues together in 1992 to support PASPA. The ruling allowed the leagues to thwart legalization of wagering, even to the point of restricting the new online medium.

Public perception has shifted, so it is expected the sports leagues will find a way to make the transition. Indeed, it seems they already have: recent efforts have refocused on grabbing a share. Here is a short rundown of the leagues and how their stance has recently changed.

National Basketball Association (NBA)

The NBA has been a supporter of legalizing sports wagering, and its Commissioner Adam Silver is a longtime proponent. Silver sees potential benefits in increased fan engagement with the sport.

Silver is also adamant about enacting effective regulation to protect basketball’s integrity. The NBA seeks a share of gambling profits, claiming costs of future efforts needed to safeguard the sport’s integrity.

National Football League (NFL)

No league has spoken more about integrity and standing firm against gambling than America’s favorite sport … nor have any been so quick to reach for a slice. After the Supreme Court’s decision, the NFL publicly stated their intent to lobby Congress for a share.

Major League Baseball (MLB)

Major League Baseball challenged New Jersey’s tactics, treading a careful line in light of experience with the gambling scandal. In 2017, Baseball Commissioner Fred Manfred spoke on the proposed changes and stated the MLB’s position as seeking “to meaningfully engage and shape” the new regulatory scheme.

National Collegiate Athletic Association (NCAA)

The NCAA has been a longtime opponent of legalized sports betting, taking the position that legalized sports wagering poses a threat to athletes and the integrity of the competition. In the recent past, the NCAA has banned on-air advertising during its championship events by the two main daily fantasy game brands, DraftKings and FanDuel.

The NCAA appears to be reconsidering its stance. NCAA President Mark Emmert recently suggested a change of policy in favor of legalized wagering, claiming the board is having “active discussions about that issue.”

Betting on a Bright Future

With the US Supreme Court’s removal of legal restrictions against sports betting, the gambling industry is changing rapidly. As the number and kind of betting establishments increase, we can expect to see more opportunities for advertisements for betting, something that is certain to increase the customer base, especially among youth.

One example is the negotiations underway to bring sportsbook action to Buffalo Wild Wings, a restaurant chain that began as a collegiate attraction and which models its interiors to imitate the inside of an actual sports stadium.

If we look overseas to nations that have a mature gambling industry in place, we can see sponsorships from betting companies becoming an integral part of professional sports.

Wagering is set to expand beyond sports. In Britain—one of the most highly developed gambling markets—bookmaker Ladbrokes hired an aircraft banner to tout the odds they were giving on the name of their queen’s recent great-grandchild, which hovered above the hospital as the Duchess in question was in labor.

Whatever the future, it seems almost certain to be lucrative for gambling interests.

Challenges and Benefits of Sports Betting in Other Countries

Gambling is restricted in many places overseas, but Europeans are more welcoming. Many of the large variety of casino card and dice games were invented and popularized in Europe. Certain areas of Europe place greater restrictions on gambling, such as Germany and Norway, but the attitude is largely one of integration and acceptance.

The positive aspects of gambling are not limited to economics. The socializing that gambling promotes have benefited many European countries, and this internationalization has helped other cultures too. For example, Hong Kong owes its prominence and “melting pot” character partly to a sizeable gaming industry.

Challenges to Learn from

Gambling may impact individuals and families. To alleviate the problem, there is often a nominal tax on gambling.

Another challenge is to the sports themselves because wagering increases incentives to cheat or collude for a certain game result. Sports affected by wagering must maintain an image of integrity, so spectators retain trust in the outcome.

How Gambling has benefited Nevada

Nevada has had legalized gambling for many decades and has benefited from both gaming and tourism-related revenue. The influx of visitors that come for the gambling amenities also brings in money for the general economy, including food service, lodging, and transportation.

Another benefit Nevada has seen from its gambling industry is in the construction and maintenance of facilities. The airline and hotel services have been strong for many years, and now the location is a destination for both travel and retirement.

Potential Benefits of Legalized Gambling

One primary prospective benefit of legalized gambling is an increase in tax revenue. The American Gaming Association (AGS) estimates an additional $26 billion being generated in economic activity from legalized gambling.

Adding to that total is money currently being wagered illegally. The AGS estimates that well over $100 billion is now going to illicit gambling operations. Bringing in just a fraction of this amount represents a significant growth of future tax dollars.

According to these estimates, legalized gambling will contribute as much as $5 billion to the general economy of the states. Approximately 152,000 jobs paying over $7 billion in wages are projected.

Guide to Legal US Online Betting

In May 2018, the Supreme Court lifted the 1992 Federal ban on sports betting by declaring the existing law unconstitutional. The law was called the Professional and Amateur Sports Protection Act (PASPA) or Bradley Act of 1992. So, the initial question of, “Is it legal to bet on sports in the US?” has been answered. The answer is “Yes” or “Kind of,” and in reality, it depends entirely on the state. Without an overarching federal law, the states must regulate gambling, and it gets a bit complicated. To simplify, we’ve broken down betting into categories:

  1. Online Sports Betting –bets on sports games (sportsbooks)
  2. Daily Fantasy Sports- single day fantasy drafting with predetermined prize pool.
  3. Online Lottery– lotto draw games, keno, instant games
  4. Online Casinos– slots, roulette, blackjack, craps, etc.
  5. Online Poker – poker is often a standalone product, but can also fall under casino games

The Shifting Online Gaming Landscape

The recent Supreme Court decision on sports betting in Murphy v. National Collegiate Athletic Association has further upended the already shifting landscape for wagering. In the wake of the decision, states have been rushing to put into place long-held plans to offer sports gambling, pushing forward plans that were, in some instances, already in the making when the decision was issued. Additionally, the online casino space has been slowly gaining steam, regenerating itself after previous federal efforts to curtail the space.

Online Sports Betting

Nevada

Nevada has been a pioneer in online sports betting, and for many years it was the only state where one could legally bet on sports pursuant to the federal legal framework for sports betting and the protections that it enjoyed. Its casinos rolled out mobile sports betting apps back in 2011, and the total sports betting handle skyrocketed thereafter. Initially, online sports betting was disfavored and opposed by the casinos, who believed that mobile sports betting would cannibalize revenues from the physical casinos. However, gradually the casinos came around to favor online sports betting, and their fears have not been realized. Total revenues between the casinos and the online sports betting apps have risen over 60 percent since the casinos began to introduce online sports betting.

New Jersey

In June 2018, New Jersey enacted legislation to legalize online sports betting with a July start date for wagering. The opening coincided with the start of the World Cup, and the first bet placed was by the state’s governor, who wagered for Germany to win the World Cup. Draftkings Sportsbook became the first company to offer online sports betting in the state, in partnership with Resorts Casino. According to the new law, each casino has the ability to partner with up to three online brands. The opening of online sports betting in the state was intended to boost the state’s existing casinos and racetracks. In addition, the horse racing track Monmouth intends to enter the sports wagering business as well as the Meadowlands race track. Draftkings competitor, FanDuel, also intends to partner with the Meadowlands to enter the online sports betting business in New Jersey.

Online Casinos

New Jersey Online Casinos

Legal online gambling was authorized in New Jersey in February 2013 with the passage of legislation that allowed for online casinos, provided that they had a partnership with a physical Atlantic City casino. Before the bill’s enactment, Governor Chris Christie had vetoed the bill but relented after it was agreed that the state receives a larger slice of the gambling pie. In November of that year, 13 online casinos opened, and after ironing out various software and connectivity issues, these casinos began to attract gambling volume. The online casino industry in New Jersey has been experiencing increased success recently. Online casino revenue for July 2018 rose above $24 million, a 29 percent increase year-over-year. The industry has experienced steady gains since inception, helping to revitalize New Jersey’s previously moribund gaming industry. As New Jersey continues to diversify its offerings, its revenues are likely to grow.

Pennsylvania Online Casinos

Pennsylvania is a recent entrant in the online casino business. Pennsylvania became the fourth state to legalize online casinos when it passed legislation in 2017, which followed five years of various efforts to push the bill to passage. The bill was first proposed back in 2013, but the legislation spent an inordinate amount of time stuck in committee while the issue was further studied. Various problems continued to delay efforts to pass the bill, including disputes over the local tax share and the treatment of video game terminals. Finally, after the bill passed, the state began the application process for online casinos to receive licenses, which would allow for games to be offered in partnership with local casinos. Nine casinos with operations in Pennsylvania applied for licenses to offer online table games, slot machines, and poker. The first three were approved in August 2018, with the rest of the applications to be considered the next time the board meets in September. As a result, online casinos in Pennsylvania are soon to become a reality.

Delaware Online Casinos

Delaware has long sought to become a player in the gambling industry. Delaware was one of the first states outside of Nevada and New Jersey to open physical casinos, establishing a profitable location at Delaware Park. Delaware was also an early mover in the online casino space, and in 2012 it passed legislation that allowed established casinos to offer online games to state residents. Almost immediately thereafter, the state’s three casinos began to offer online gambling. Online gambling in Delaware consists of video lottery, slot machines, and table games. The bulk of the revenue originates from video lottery games. Revenues from online casinos have not quite lived up to expectations. After an upswing in revenues in 2016, profits fell by double digits the next year.

Online Poker

New Jersey Online Poker

In 2013, New Jersey legalized online poker. Although five companies initially entered the market, several soon exited or merged. Recently, New Jersey agreed with Nevada and Delaware to establish an online poker pool, where gamblers can compete against other gamblers located in these states. Before that, New Jersey was attempting to establish an online poker venue on its own, which dampened volume. Online poker, however, lags behind overall online casino revenue in New Jersey. Still, the new tripartite partnership has stemmed from the decline in online poker revenues in the state.

Nevada Online Poker

Nevada legalized online poker after the Department of Justice issued a legal opinion that paved the way by limiting the Wire Act to only sports betting. WSOP.com is currently the only legal online poker forum in Nevada. No other vendors are licensed to participate in the state, as Ultimate Poker withdrew from the market shortly after opening. The online poker industry is subject to regulation by the Nevada Gaming Commission. The site offers a wide variety of poker games. The recent alliance with New Jersey and Delaware has served to increase WSOP’s revenues. 2018 has seen a large increase in entrants to WSOP’s events.

Pennsylvania Online Poker

Pennsylvania recently legalized online poker, as the bill permitting it was signed into law this past July. Nine of the state’s 13 casinos have applied for licenses to operate online poker. It is anticipated that Pennsylvania’s casino operators will align themselves into three or four networks to pool resources. As of now, Pennsylvania is not a part of the alliance with New Jersey and Nevada. Even though there has been a multitude of entrants eyeing the marketplace, it is expected that there will be a shakeout in the marketplace after actual operations commence, and several companies will establish a dominant position in the market.

Delaware Online Poker

The third state in the alliance is Delaware, which joined the alliance to increase liquidity. Since Delaware has a small population, it is difficult for Delaware to operate its pool without joining forces with other states. The addition of New Jersey to the pool has further benefited Delaware. Delaware legalized poker in 2012, close to Nevada’s legalization. The online poker market in Delaware is still quite small, with average monthly revenues hovering right around $20,000 per month. This is down close to 60 percent from the peak revenues.

The History of U.S. Online Betting

Early internet betting in the United States faced heavy legal scrutiny. Although domiciled offshore, these companies were placed under heavy pressure. Jay Cohen, a founder of one of the first online sportsbooks, World Sports Exchange, returned to the U.S. to face criminal charges and was sentenced to prison time for his activities.

Still, there was just enough legal ambiguity to permit early online betting venues to proliferate and thrive. Early legislative attempts to outright ban online casinos failed to win passage. Further complicating the picture was the fact that fantasy sports, which could arguably be considered gambling, was thriving. Nonetheless, there was a steady stream of indictments of online gaming executives.

In 2006, Congress passed the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA), which targeted the financial transactions that powered online gaming. The law targeted offshore operations and stifled the flow of money via payment and withdrawal processing. The modern-day equivalent is Bovada, which many Americans are using daily. Read more on the legality of offshore books like Bovada. We feel it’s highly likely that history repeats itself in a fashion and US state lawmakers try to protect US consumers and takedown offshore book competition. The definitions that were part of the statute carved out fantasy sports from the definition of gambling. However, gaming businesses were prohibited from accepting payments from players in connection with wagers. Several states tried to fill the void by attempting to pass their legislation legalizing online wagering.

On a day that will forever be remembered by online poker players as Black Friday, top executives of several online poker operators were simultaneously indicted on charges of violating UIGEA. These venues ceased operations, and their bank accounts were seized. In the process, poker players lost hundreds of millions of dollars. This ground the online poker industry to a halt before the states mentioned above began to re-create the marketplace.

As mentioned above, the UIGEA had a carve-out for fantasy sports as well as certain games of skill. In 2009, a company called Fanduel commenced operations with the premise that contests requiring players to draft teams daily were fantasy games that could be considered a game of skill. As a result, they believed that it fell into the exemption from UIGEA. Accordingly, daily fantasy sports was born. It was not long before numerous companies entered the marketplace, and the industry began to receive regulatory scrutiny. Soon, multiple states began to ban daily fantasy sports within their borders. However, other states expressly legalized the industry, which continues to thrive as the market has consolidated.

Underlying the issue of the legality of sports betting is the Professional and Amateur Sports Protection Act of 1992 (PASPA), which effectively barred sports gambling in the United States. This law was passed pursuant to Congress’ power under the Commerce Clause of the Constitution and was premised on the fact that sports gambling was harmful to the integrity of sports. The law had been under sustained legal attack by the states, who wanted to earn revenue from activity that they believed would occur anyway, notwithstanding its legality.

In 2018, the Supreme Court overturned PASPA as unconstitutional. New Jersey challenged PASPA in its longstanding efforts to promote legal sports gambling. According to the Court in its decision, Murphy v. National Collegiate Athletic Association, PASPA forced the states to take responsibility for enforcing federal laws. This rendered the statute to be unconstitutional. According to the Court, if Congress does not directly exercise its power to regulate gambling on its own, the states are free to enact their laws.

Legalization Post-Murphy

States had been preparing to legalize online gambling, anticipating that the decision in Murphy would find PASPA unconstitutional. As a result, several states are poised to take quick action to legalize sports betting.

New York was one of the states to mount a full-scale attack on daily fantasy sports before explicitly legalizing it. Nevertheless, New York has moved towards legalizing sports betting. In 2013, New York had passed a bill to allow sports betting at four New York casinos. Although the New York casinos have largely built infrastructure to handle sports betting, the state legislature finished its session that past June without re-activating the legalization bill. The situation is expected to be addressed next year. Once betting is legalized, Draftkings has a deal with Del Lago Resort to offer online betting in New York.

West Virginia has been one of the quickest movers in the space after New Jersey and Delaware. In March, the West Virginia legislature passed a bill that legalized sports gambling, pending the enactment of regulations. These regulations went into effect in June. In August, Hollywood Casino in Charles Town was the first casino to receive a license to offer sports betting. The casino will be able to accept physical and online gets. The goal is for that casino to accept sports bets in time for the upcoming football season, after building the necessary infrastructure and training employees.

Pennsylvania had already passed a bill in 2017 that legalized sports gambling and daily fantasy sports. The sports gambling part of the bill could not become effective as long as PASPA was in place. Now, in the wake of Murphy, Pennsylvania can offer sports wagering. As mentioned above, three casinos in Pennsylvania received licenses to offer online betting. These casinos have not yet petitioned the state regulatory board to accept sports wagers.

In June 2018, Rhode Island legalized sports betting. The legislative approval, however, extends only to sports betting at casinos. There is currently no legal provision that would allow online betting in Rhode Island. Since neighboring states are expected to soon permit online wagering, this could place Rhode Island at a disadvantage and negate any financial benefits that the state was counting on receiving.

  
Sam Shefrin is the founder of Lineups.com, Inc. Before Lineups, he started Daily Fantasy Cafe, Inc. in 2014. Armed with a passion for sports and every Atlanta team, his journey continues with the goal of making Lineups a premier sports analytics destination. 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.