Legal US Online Sports Betting
Your Guide To Legal US Online Sportsbooks
Legal US sports betting is quickly coming to much of the country, after decades of Nevada having a near monopoly. Where can you bet now? Where can you bet in the future? Read on for a look at the state of sports wagering in the US.
What’s the current state of sports betting in the US?
- Yellow states have sports betting laws grandfathered in under PASPA
- Green states have a legal, regulated sports betting industry enacted post-SCOTUS decision
- Blue states introduced sports betting legislation in 2017 or 2018
There was a federal ban on sports betting in the United States from 1992 to 2018 under the Professional and Amateur Sports Protection Act (PASPA). The 1992 law granted immunity to four states that had previously allowed sports betting inside their borders. Those states are Nevada, Delaware, Oregon, and Montana.
The state of New Jersey challenged the legality of PASPA. The Supreme Court heard oral arguments in late 2017. On May 14, SCOTUS issued a decision reversing the ban, striking down PASPA in full by a vote of 6-3. Thanks to the decision, the following states can now offer legal sports betting, once they create and approve regulations, that is:
- New Jersey – Launched June 14
- Mississippi – Launched Aug. 1
- West Virginia – Launched Aug. 30
- Pennsylvania (established temporary regulations in June 2018)
- Rhode Island
Additionally, New Mexico became the sixth state with sports betting when it started taking bets on Oct. 16. Santa Ana Star Casino & Hotel signed a deal with USBookmaking in early October to launch a sportsbook.
What makes New Mexico an interesting case is that Santa Ana is a tribal property. Mississippi was the first state to launch tribal sports betting, but it was done in tandem with a state law. In Santa Ana’s case, sports betting is still illegal in the state, but the tribal land within the state can accept bets.
The Pueblo of Santa Ana Gaming Regulatory Commission regulates the casino’s wagers.
Additionally, Delaware was actually the first into the expanded market. The state used its existing sports betting law on the books, established single-game wagering regulations, and began taking bets on June 5, 2018.
What we’re watching: Week of October 15
The industry is still coming down from last week’s Global Gaming Expo in Las Vegas, which offered a sneak peek into the future of gambling. Sports betting took center stage for this year’s event, with an entire symposium devoted to the emerging industry.
- Scientific Games has acquired Don Best, one of the leading providers of real-time betting data. The move drew broad praise within the industry.
- The Arkansas Supreme Court decided that a proposal to legalize sports betting will remain on the ballot. Voters will decide the issue next month.
- DraftKings Sportsbook is running a sports betting national championship this year with $2.5 million in the prize pool and a seven-figure top payout.
- A New Mexico tribe began offering sports betting to patrons visiting the Santa Ana Star this week.
- Speaking of tribal gaming, MGM-GVC Interactive has struck a sports betting deal with a California tribe that would allow the activity at Thunder Valley, if legalized.
Where can you bet on sports?
Nevada allows wagering on a variety of approved sports at land-based sportsbooks. Plus, sports betting is authorized on the internet through mobile apps connected to those sportsbooks.
Delaware started taking single-game wagers in addition to its pre-existing parlay wagering on National Football League (NFL) games through the state lottery. With laws that supported the offering of single-game wagering, the state quickly assembled regulations. It started offering sports betting on Tuesday, June 5.
New Jersey started accepting wagers on June 14, just three days after New Jersey Gov. Phil Murphy signed the bill into law. Monmouth Park and Borgata Casino are the first two New Jersey properties to start taking wagers. Online sports betting can begin 30 days from live betting launch. The FanDuel Sportsbook at The Meadowlands launched a couple of weeks later. There are currently eight sportsbooks operational in the state.
On Aug. 1, DraftKings soft-launched its mobile betting app in New Jersey and went fully live a few days later. It was the first time someone placed a legal US bet online outside of Nevada. DraftKings partnered with Resorts Casino for sports betting. The app launched without a brick and mortar sportsbook at Resorts. Those wishing to bet on the DraftKings Sportsbook app need to be at least 21 years old and physically located within New Jersey. Resorts opened its on-property sportsbook on Aug. 15 without any DraftKings branding.
It took three weeks for the second mobile app to join the NJ market. On Aug. 22, Borgata owner MGM Resorts launched a playMGM mobile app. Unlike DraftKings, the offering is mobile only and cannot be accessed via computer. SugarHouse Online Sportsbook & Casino, which went live on Aug. 23, was the first gaming operator in the US to launch an integrated online sportsbook and casino.
Two more apps entered the market just in time for college football season. Both William Hill and FanDuel went live online over Labor Day weekend. Caesars launched its mobile sports book on the opening day of the NFL season. With 888 Sport going live on Sept. 10 and BetStars going live on Sept. 13, the total number of NJ online sportsbooks is up to eight.
On the same day that NJ went mobile, Mississippi went live with wagering at two MGM properties, the Beau Rivage and Gold Strike Tunica. Currently, there are 13 commercial casinos in the Magnolia State taking in-person wagers. The law there stipulates no mobile wagering off property though.
Mississippi is also the first state outside of Nevada to have a tribal casino with sports betting offerings. The Mississippi Band of Choctaw Indians launched wagering at Pearl River Resort at the beginning of September.
As of Oct. 16, a single property is taking bets in New Mexico. The Santa Ana Star Casino and Hotel is now the first tribal casino in the country to operate on native lands within a state that does not offer legal sports betting.
The state’s compact with the tribe allows for sports betting without a law change, so Santa Ana Star was able to streamline the process and launch as the sixth state with a sportsbook, beating both Pennsylvania and Rhode Island.
West Virginia was the fifth state to launch post-SCOTUS ruling. Hollywood Casino at Charles Town Races. The property launched a couple of days ahead of schedule, taking the first bet on Aug. 30. The state finalized regulations in early August and started issuing betting licenses shortly thereafter. Currently, FanDuel (via The Greenbrier partnership) and Penn National are the two licensees. On Sept. 13, the FanDuel Sportsbook opened at The Casino Club inside The Greenbrier, the upscale private resort casino in White Sulphur Springs.
States on the way?
Pennsylvania and Rhode Island also legalized sports betting. The two states are in various stages of crafting regulations and approvals, but will not have anything launched until midway through football season.
Arkansas will have a proposal on the ballot this fall allowing voters to decide the fate of sports betting in their state.
Oregon offered parlay sports betting through its state lottery as well. However, the state made this illegal in 2007 under pressure from the National Collegiate Athletic Association (NCAA). The NCAA refused to let the state host championship basketball games.
Legal sports betting in Montana has always been limited to a sports pool law permitting licensed taverns and bars to create betting squares contests. All of the money wagered on the contests must be returned to players.
Key wagering laws
In 1992, PASPA essentially made Nevada the only state allowed to offer legal sports betting. The law marked an effort by the federal government to end gambling-related corruption in sports.
American gangsters found some notable success coercing pro athletes to shave points or fix games so they could profit gambling on them. One infamous example is the 1919 Chicago White Sox World Series scandal.
PASPA ostensibly came about to prevent the proliferation of such scandals, as well as maintain the integrity of sports in the country.
Now, with PASPA deemed unconstitutional, states can decide whether they want to offer sports wagering. Additionally, Congress now has the option to draft and pass a law legalizing sports betting at the federal level.
The Interstate Wire Act of 1961
The Interstate Wire Act of 1961 is often referred to as the Federal Wire Act. This law essentially prohibits the operation of a number of betting businesses across the country, particularly those using the transmission of a wire communication to place bets. The law passed as a part of then US Attorney General Robert F. Kennedy‘s effort to suppress organized crime activity across the country.
Kennedy believed gambling operations run by organized crime groups were so completely intertwined with communications systems that going after their use would cripple the operations.
In December 2011, the United States Department of Justice released a legal opinion on the act. The decision concluded anything outside of sporting events falls outside the act’s reach. The opinion was meant to clarify whether states could sell lottery tickets on the internet.
However, Delaware, Nevada, and New Jersey all enacted online gambling legislation based on it. The decision did clarify the act was a part of the federal ban on sports betting.
Efforts by states to get sports betting
A number of states have either considered or passed laws seeking to legalize sports betting. The following states introduced sports betting legislation in either 2017 or 2018 but have not yet passed it into law:
- South Carolina
The New Jersey challenge
The idea of legal sports betting in New Jersey passed through a public referendum in 2012. A bill permitting the state’s racetracks and Atlantic City casinos to offer sports betting similar to that in Nevada became law in 2013.
However, a number of pro and amateur sports leagues fought the law in court. They successfully struck it down. The state appealed to the Third Circuit Court, and the decision was affirmed.
The state passed another sports betting law in 2014 and lost again in district court. The Third Circuit Court of Appeals affirmed that decision as well. The state appealed that decision and lost that appeal too. The case moved on to the US Supreme Court. The Solicitor General recommended the court pass on hearing the case, but the court took it up and heard oral arguments in December 2017.
Again, on May 14, 2018, SCOTUS ruled PASPA’s sports betting ban unconstitutional.
The Michigan effort
A Michigan lawmaker reintroduced a bill to legalize sports betting in 2017. State Rep. Robert Kosowski said he was willing to challenge the federal government ban on sports betting. He reintroduced the same bill that had a committee hearing in 2015 but failed to gain traction.
Kosowski believes sports betting is already a billion-dollar industry in Michigan. He is seeking to tax and regulate it, rather than allow illegal bookmaking to continue.
The bill got a hearing in front of the House Regulatory Reform Committee in 2017, but no vote.
Are attitudes changing about sports betting?
States are now lining up to introduce sports betting legislation. While only four passed such legislation, another 15 are considering a bill. With nearly half the states passing or considering new laws and a favorable SCOTUS decision, it is fair to say the tides are shifting.
Sports betting is a multi-billion dollar market in the United States, and the current operators are illegal bookies and offshore gambling websites.
Cash-strapped states looking for innovative new revenue sources are starting to see the sports betting market as a realistic way to generate money. This is similar to the change in attitude towards land-based casino operations and online gambling.
Position of sports leagues
When New Jersey passed sports betting legislation, major pro sports leagues, including the NFL, NHL, NBA, and MLB were the ones who took them to court to oppose it. Many of the same sports leagues stood in opposition when Delaware looked to expand its lottery parlay wagering beyond football.
However, the leagues’ stances on sports betting may be softening. In fact, NBA Commissioner Adam Silver wrote an op-ed in the New York Times in 2014 calling for the repeal of PASPA. He claimed the popularity of gambling across the United States as a reason why.
Silver called for Congress to adopt a federal framework allowing states to authorize betting on professional sports. Of course, he also said it should be subject to regulatory requirements and safeguards. As new bills rolled out, it became clear Silver and other leagues also expect a cut of the sports betting revenue—a move drawing extensive criticism from the gambling industry.
Other leagues are echoing the NBA’s sentiments in the wake of the Supreme Court decision. They are lobbying for a federal sports betting bill with a cut for the leagues to help finance measures to preserve the integrity of their games.
On July 31 though, the NBA did something unprecedented. It partnered with MGM Resorts. MGM will be the official sports betting partner of the league. In exchange for $25 million, MGM will get to use league data and logos in its sports betting promotion for the next three years. The deal establishes a precedent that casino companies should pay sports leagues for certain data and content rights.
The American Gaming Association campaign
The AGA has long maintained illegal sports betting is a rapidly growing market in America. It also puts forward that laws against it only serve to push it all further underground.
The AGA says sports betting has only grown more prevalent since PASPA passed in 1992. It claims Americans now bet in excess of $150 billion annually, almost all illegal wagers. It remains to be seen how illegal wagering will be affected by the repeal of PASPA.
The AGA sends out press releases surrounding major sports events like the Super Bowl and March Madness estimating how much money Americans will bet on the events. The organization also called for the repeal of PASPA.
The message is clear: The AGA feels maintains a legal and regulated marketplace will generate tax revenue and jobs. They also say it will protect consumers while continuing to strengthen the integrity of major sports across the US.
September 2018 Congressional Hearing
There have been few opportunities for the various stakeholders on this issue to meet. However, five opinion leaders with differing viewpoints met on Sep. 27 to discuss their points of view with members of the US House of Representatives.
The House Subcommittee on Crime, Terrorism, Homeland Security, and Investigations conducted the hearing, which was entitled “Post-PASPA: An Examination of Sports Betting in America.” The hearing featured statements by five witnesses and a question-and-answer session from the 16 members of the subcommittee.
The main purpose of the hearing was to present information to the assembled lawmakers. No bill or motion will come from this discussion.
The five witnesses at the hearing were:
- Les Bernal, National Director of Stop Predatory Gambling
- Jon Bruning, Counselor for Coalition to Stop Online Gambling
- Becky Harris, Chair of the Nevada Gaming Control Board
- Jocelyn Moore, Executive Vice President, Communications and Public Affairs of the NFL
- Sara Slane, Senior Vice President of Public Affairs of the American Gaming Association
As indicated by their titles and positions, most of the witnesses presented testimony against state-regulated sports betting. They repeatedly cited concerns about game integrity and protection of minors.
Committee chair Jim Sensenbrenner (R – WI) concluded with a statement that indicated the lone takeaway from the hearing was that federal legislation and oversight would be imperative for sports betting. However, without another hearing or bill proposition, the state-based spread of sports betting is likely to continue at its current pace.