Sports Betting Laws
As with any topic relating to betting in the United States, it's important to know the laws that affect it. In the case of sports betting, it's the only area of gambling in which all three major federal laws relate to it. But before American sports bettors go into a panic, it's important to understand exactly what the laws themselves say. While reading laws can sometimes be tricky and can be worded in vague ways, we’ve broken down each major law clearly so that you can see where you stand in the world of sports betting legality in the US.
The three biggest federal laws relating to sports betting and legal sports betting sites in the United States are addressed right below, in effort to give you the necessary information for your future betting endeavors. Rest assured that even though the laws dealing with sports betting are in effect, legal sports betting can still be done. The laws we are going to talk about are the Federal Wire Act, the Unlawful Internet Gambling Enforcement Act, the Professional And Amateur Sports Protection Act, and a brief mention about state laws and how those can come into play.
Federal Wire Act Of 1961
The Wire Act actually goes back several decades, all the way to the 1960s. The original intention was not related to sports betting at all but was geared towards the elimination of organized crime. And one of the ways thought to be able to do that was to strike at gambling. But if we flash forward to 2011, the Wire Act was then said to apply only to sports betting and is a far cry from focusing on organized crime. So what does the Wire Act do?
The Wire Act targets the way in which a bet can be made, processed, or even assisted in making is banned under this law. No form of wire communication can be used by a gambling business to facilitate such transactions. As a result, gambling businesses in the United States don't really have much of a choice but to cease operation. Sportsbooks in one state can’t serve individuals that are located in another state no matter what type of communication used. This law is primarily targeted at domestic sportsbooks and not the casual sports bettor.
Unlawful Internet Gambling Enforcement Act of 2006
The origin of the UIGEA goes back to the Safe Port Act, a piece of legislation passed in 2006. The funny thing about the Safe Port Act is that it was not gambling related. The UIGEA was a mere attachment to this popular piece of legislation, and passed easily, much to the chagrin of gambling advocates.
Dealing specifically with gambling on the Internet, the UIGEA does not only target online sports betting. What it does do though, is prevent a financial institution from processing or accepting a payment that comes through an unregulated website. Seeing as how most online sportsbooks are unregulated it made it more difficult for them to send funds to sports bettors, but it did not make it impossible. This Act is mostly focused on banking institutions and financial processors, not individual online sports bettors.
Professional And Amateur Sports Protection Act
The Professional and Amateur Sports Protection Act (PASPA) was a federal law that limited regulated sports betting to just four states (Nevada, Delaware, Montana, and Oregon). Active from 1992 to 2018, the federal law essentially prohibited sports wagering from spreading across the U.S. Nevada was the only state permitted to offer single-game wagering, hence why the state is considered the gambling mecca of the USA.
In the historic Murphy vs. NCAA case, the Supreme Court found that PASPA was in violation of the 10th Amendment, specifically the “anti-commandeering” part of the doctrine. Also known as the New Jersey sports betting case, the ruling opened the doors for states across the nation to create their own laws regarding the industry and to legalize sports betting.
Laws In The Individual U.S. States
What can also come into play, however, are the state laws. In terms of actual state laws against sports betting, legislation varies from state-to-state. Policymakers could choose to impose harsher restrictions on sports betting or allow residents to bet freely at any licensed operator. Some of the states that have legalized sports betting include New Jersey, New York, Pennsylvania, Mississippi, New Mexico, Tennessee, Indiana, Washington D.C., Rhode Island, and West Virginia. If you are curious about the betting laws in your area, a local attorney would be able to answer those questions for you.