Betting on the outcomes of sporting events has been very popular throughout human history, and this is especially true in the United States. Americans love sports, they love to gamble, and they have the money to do it, so when you put all this together, it’s no wonder why sportsbetting is so massively popular there.
It’s not even clear how much money Americans wager on sports every year, but it is clear that we’re talking about a massive amount of money, in the hundreds of billions of dollars. The National Gambling Impact Study Commission in 1999 put this figure at around $400 billion a year for instance.
Sports betting has gotten even more popular, if anything, since, and this study was done at a time where online sports betting was in its infancy. It’s exploded in popularity since, and although these things are very difficult to track, it’s likely bigger and maybe even much bigger today.
Of the various forms of gambling, the lottery is a huge one, due to its high market penetration, in other words a high percentage of people play. Casino gambling is also very popular, especially with online casinos being available now, and more and more land based ones being built around the country. Poker enjoys less popularity but has really gained in popularity over the past decade.
Sports betting though is bigger than any of these, and by many accounts, bigger than all of these other forms put together. Sports betting is simply king in the United States. The amazing thing is that this is the case in spite of sports betting, on events other than horse or dog racing that is, only being legal in 4 out of the 50 states in the country. Being legal though has never had much to do with this market though.
America’s Love Affair With Sports Betting
Americans simply love to bet on sporting contests. Organized sports betting goes all the way back to the Civil War days when the first horse race tracks were built, and people just didn’t want to watch the horses run, they wanted to bet on the outcome as well.
The biggest appeal of betting on sports is that the activity is fun to watch in itself, and there’s a lot of money spent on watching sports even without the gambling, and that’s a 60 billion dollar a year industry alone in the United States.
No one is going to pay to watch people roll craps or watch a ball go around a roulette wheel though if there is no money on the line, and people wouldn’t really want to play these games for fun either, or at least there’s no great appeal in it, and even though players do play free casino games online, it’s at least for imaginary money so they can imagine winning at least.
So with these games almost the entire enjoyment experience is based upon the excitement of the gambling itself. With sports betting, the mere viewing is plenty exciting and when you are gambling on the events as well, this adds even more fun, a lot more actually.
When you think of all of the major sports leagues in the U.S., well that’s pretty big business, but when you consider that sports betting is several times bigger than all of these put together, in sheer dollar amounts, you get an idea of just how big sports betting really is in this country.
The Legality of Sports Betting In the U.S.
Sports betting has been historically been played through illegal channels, and the laws as far as betting on sports do differ by state, with quite a few states pretty clearly disallowing it. Betting with a bookie is one thing though, but betting online on the internet does introduce some unique circumstances, including where the bets are said to occur.
It could at least be argued that if you place a sports bet though an online service which is located in another country, the betting action occurred not in your state but in this other country, where the server is located that accepted it. So this could be seen as visiting the country and betting at one of their sports betting shops, and in that case you certainly wouldn’t be violating any potential state laws against it because you didn’t place the bet in the state.
The opinion these days though, the opinion of the government at least, is that the bet is to be seen as both occurring in the location where the bet was placed and at the location where the bet was accepted, so in this case it the betting would be treated the same way as if you placed it with an in state bookie.
There’s some question though as to whether such betting would fall under the jurisdiction of state law, because this is an interstate transaction and therefore it may be more proper to see it as being under federal jurisdiction. The anti gambling laws of states do differ in their wording as well, Washington State is the only one that expressly prohibits online gambling, and in other states this may be at least a matter of some interpretation as to whether the existing law may prohibit people in their state from placing bets on the internet.
There is also a lot of focus on games of chance, and whether or not sports betting is a game of chance or not is up for debate at least, as it’s hard to imagine what the element of chance would consist of in a sporting event, as these are contests of skill, and purely so, as a general rule.
The law may not just prohibit games of chance but other contingent events as well, for instance New York’s law prohibits betting on any event that the outcome is unknown. So this is not just a matter of the bet being based upon skill, which was the opinion of the court in the famous case United States v. DiChristina, and a more careful reading by the judge would have revealed that this wasn’t of any consequence actually.
Sports betting itself is a matter of skill, seeking to use one’s knowledge to determine that one event is more probable than another, whether a team will win or lose a game in addition to a wide variety of permutations. In some states being skill based may matter, although some states do look to make the inclusion of sports betting pretty clear with clauses that include outcomes based upon contingent events, and sporting events are certainly contingent.
So from a player’s perspective this is all determined at the state level, and the federal government could have a say here but there’s nothing on the books that even addresses online gambling, including online sports betting.
The Federal Wire Act does address sports betting, exclusively actually, but its focus is purely on those in the business of gambling, gambling operators in other words. Some people think this law makes betting on sports illegal but this view is incorrect.
Betting On Sports Online in the United States
Whether or not placing sports bets online in the United States may be legal or not in the state that a player is located doesn’t really matter from a practical perspective.
Since there is a clear federal law against operating a sports betting operation in the United States, as opposed to other forms of gambling such as running casino and sports betting operations, convictions under the Wire Act are much more than empty threats with sports bookies, and there have been a number of convictions of Americans who have been caught and prosecuted.
This all started In 1998 when American Jay Cohen and his World Sports Exchange were found to violate the Wire Act. Since then there have been several other notable convictions, but operators are much wiser these days and do not expose themselves to such risks as a general rule.
If you are an American, it’s probably wisest to just stay out of the sports book industry, as there’s been some instances where Americans have been repatriated so to speak to face charges back home for this.
They really can’t do anything to stop foreign bookmakers though, sure they are violating the Wire Act, but the Wire Act does not apply to them in any sense, and certainly does not pre-empt the laws of their own country where their operations are perfectly legal.
Players who do reside in the United States are subject to not the Wire Act but the laws of their own state concerning online sports betting, but the problem for the states here is a matter of being able to enforce these laws against it should they exist.
There’s no real practical way to do that actually when the bets are placed online. So the force of these laws are limited to deterrence, hoping that people will abstain merely because it is against the law.
It’s unusual for laws to be unenforceable though, but when this is the case, they need to rely on their moral force primarily, in other words the fact that the act is wrong in itself independent any risk of being charged with a crime for it.
Many though do not feel that online sports betting is morally wrong, and generally may instead feel that it is morally wrong for the state to impede their personal liberty by seeking to make sports betting illegal. So in this case there’s really nothing stopping them from doing it, and this is a big reason why it’s so popular in the U.S.
The authorities really don’t stand a chance against the massive appeal and popularity of sports betting in the U.S., and given the demand, it’s hard to imagine ample opportunities to bet on sports to one’s heart’s content not continuing indefinitely.
If governments want to have a say in this, the only real option is for them to look to regulate the industry within states and within the country, but thus far they have been too stubborn to see this from enough of a practical viewpoint to allow themselves to benefit from all of the money spent on this each year.