How Legal (or Illegal) Are Online Sportsbooks?

Question Mark With a Sportsbook and Justice System Background

Separating fact from fiction can get tricky when it comes to the legality of internet sportsbooks, especially in the United States, where states are regularly passing new legislation that affects local laws.

In the past 10 years, the regulations surrounding internet sportsbooks have shifted dramatically, leading to a rapid fundamental change in how lawmakers view sports betting and the sportsbooks that facilitate the action.

But just how legal (or illegal) internet sportsbooks are still remains murky. Let’s take a look at the facts. Depending on where you live, the answer may be different.

Recent Legal Decisions You Need to Know

Several federal laws exist about the operation of sportsbooks online that are geared toward American gamblers. You should understand that most of the regulations target the sports betting industry and financial transactions stemming from sports betting.

Only one federal law prevents you as an individual from wagering on sports, and that’s The Federal Wire Act. The licensing of operators amongst any related industry regulation is handled as a state’s rights.

The Unlawful Internet Gambling Enforcement Act

This law doesn’t make any mention of online sports betting. However, The Unlawful Internet Gambling Enforcement Act does stipulate that it’s a crime for banks to transfer any monies exchanged from illegal betting. The law’s fundamental role is to target unlawful online sportsbooks operating on US soil and not the gamblers involved in online betting.

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The critical legal distinction here is that the act of betting in and of itself is not categorized as criminal. It only aimed at criminalizing the sending of cash funds to a sportsbook operating within the United States.

Therefore, if you can dance around the law and find an alternate way of getting your money in a sportsbook’s hands, you are free to play.

The law goes so far as to explicitly declare that it hasn’t the authority to deem online gambling as legal or illegal. Attorneys have assured me that the odds of being arrested as an online sports bettor are akin to hitting the Mega-Millions jackpot.

Obviously, the operations licensed by individual states to legally conduct business in the United States are not subject to this law. Accordingly, financial institutions can do business with any legal gambling operation.

Murphy v. NCAA

May of 2018 was a time of massive change in the legal landscape in sports betting. The Supreme Court made a ruling on the case, effectively ending the Professional and Amateur Sports Protection Act.

Baseball Glove and Ball With Money

The court’s decision immediately suspended a federal ban on sports betting. The nation’s highest court’s groundbreaking decision also ushered in an era in which states are now free to handle sports betting however they choose.

Practically speaking, this has resulted in the federal government no longer being involved in sports betting regulation. For you, this means that state laws will set the tone for sports betting where you live.

Should You Worry About State Laws?

I fundamentally oppose worry. However, you should absolutely be mindful of state laws regarding sports betting for your state of residence.

The list of states passing legislation to permit in-person and sports betting online is expanding at an explosive rate. Unfortunately, no nationwide license exists for sportsbooks who wish to serve American sports bettors coast to coast.

Your best option is to stay current on where your state and surrounding states sit on this. It is in your best interest to wager with the sportsbooks with the proper license from your state gaming authority. You are still unlikely to face legal issues for betting at a site without appropriate licenses.

The legitimate online sportsbooks are wholly regulated and offer much more friendly financial transactions. Typically, these sites come with an increased level of security as well.

Sportsbooks operating in states that have legalized online betting will confirm your location before you ever place a bet. If an internet sportsbook uses geo-comply software, you are almost certainly at a safe and, moreover, legal site.

Where to Bet on Sports Online

You can always find someone to take your bets no matter where you live. You may be limited on the assortment of games and the amount of action they’ll take, though. It may not be legal either, but you can find someone to take your bets.

If you’re only interested in betting on sports legally, you simply need to be over 21 years old and live in an area that has legalized gambling. While many regions of the globe have already established a long-standing set of guidelines for sports betting, the movement is fresh and gaining traction in the United States.

Suppose you’re a US gambler living in the state of Nevada, New Jersey, Delaware, Pennsylvania, or West Virginia. In that case, you can find an online sportsbook and start betting as soon as you finish reading this post. You won’t even have to leave your seat.

Rhode Island and Mississippi states allow sports betting, but only if you physically go to a sportsbook. And New Mexico seems indifferent on the matter, so long as you don’t start placing bets on college games.

Are Other States to Follow?

The short answer is yes. It would be a huge miss for states to not follow suit on internet sportsbooks. In Pennsylvania and New Jersey, almost 90% of bets are placed online.

Delaware added sports betting in June 2018. Today, there are three casinos licensed to accept wagers. However, there is not a single internet sportsbook operating in the state. It is entirely legal for residents to place bets online. Still, there haven’t been any companies to jump into the action, not yet anyway.

New York initially failed to pass legislation that would allow online sports betting, but the law passed the following year. Nearly all internet sportsbooks in the United States accept customers from New York.

The Offshore Option

A nearly endless supply of internet sportsbooks operates overseas. While offshore internet sportsbooks aren’t regulated by US authorities, many have been in existence since the dawn on the internet.

Offshore internet sportsbooks may offer their service to several countries, but make no mistake about it, they mostly exist to serve US gamblers. The size of the United States and the overwhelming amount of underserved sports bettors are incredibly alluring.

Of course, with so much money at stake, there come some unsavory businesses as well. You should be careful to weigh the pros and cons in addition to heavily vetting any possible suitor before making a deposit.

Are These Offshore Sportsbooks Legal?

These sites are not regulated by any US governing body and, therefore, are not considered legal in the US.

Despite their illegal status, Americans have placed bets over the last 20 years in the millions with these internet sportsbooks. Perhaps more importantly, for our purposes, they have done so without any blowback from the government.

Smiling Man Sitting Outdoors Using a Tablet

While offshore internet sportsbooks are technically illegal, they may be the only feasible option for many US sports bettors.

I have never spoken to a sports bettor that has made their due diligence, bet on a trustworthy internet sportsbook, and had any issues making a withdrawal. I am not suggesting that you engage in any illegal or illicit behavior. I simply want you to know that this option exists and is used by many American gamblers.

Has There Been a Fundamental Change in Attitudes?

Currently, 15 states are considering bills regarding legalizing online sports betting in the US. That brings the total number of states that have passed or are considering legalization to almost half. You’d be kidding yourself if you can’t see that the tides are shifting.

Cash-hungry states are on the hunt for booming new sources of revenue and are taking notice. The sports betting industry is an immediate method of generating piles of money for the state.

Sports betting accounts for billions of dollars exchanging hands annually in the United States. Others want in on the action. It would be a grave error on the part of states to not legitimize this into taxable dollars.

Conclusion

The legality of internet sportsbooks is murky. In some areas, they operate with complete impunity, and others operate in locations overseas away from US authorities’ prying eyes.

The bottom line is that even in areas where they are illegal, it is the internet sportsbook and not the individual that authorities are interested in.