Skip to content

Interest in Online Sports Betting Is Rising. But Is It Legal?

The pandemic prompted the closure of casinos across the United States, and gaming venues that are now reopening are generally required to follow strict protocols around physical distancing and sanitation. These changes may prompt more gamblers, including sports betters, to turn to online betting options.

But is online sports betting legal in the US? Before 2018, the answer was generally "no." The Professional and Amateur Sports Protection Act of 1992 (PASPA) outlawed sports betting nationwide, with the exception of a few states. In 2018, however, the US Supreme Court overturned PASPA for infringing on states rights, and opened the door for states to create their own regulations.

As a result, sports betting laws have been in flux for the last couple of years as state legislatures work to draft and adopt their own regulations. As of the publishing of this blog post, more than 20 states and the District of Columbia allow some form of sports betting, but this doesn't mean it's open season for online or mobile betting platforms. Each state has particular rules around sports betting to which a merchant must adhere. We outline where many states currently stand below.

 

The following states legally offer online sports betting. Mobile bookies must hold a state-specific license.

 

States listed below have passed legislation allowing online sports betting but do not yet have any live, licensed operators:

  • Delaware
  • Rhode Island
  • Michigan
  • Illinois
  • Tennessee

 

The jurisdictions below will only allow sports betting through their lotteries, but may allow for lottery-run mobile betting:

  • Oregon
  • Montana
  • Washington, DC
  • Rhode Island

 

Five states have legislation currently only allowing for in-person sports betting:

  • Mississippi
  • Arkansas
  • New York
  • New Mexico (only tribal casinos)
  • North Carolina (only tribal casinos)

 

Of the remaining states, several are considering legislation to legalize sports betting in some form.

 

Several sports betting websites claim that because they are located in and operate within the laws of another country, it is legal for US residents (or residents of other countries) to place bets through their platforms. While the US government may be unlikely to seek action against an individual user placing bets through one of these offshore websites - federal and state laws are focused on restricting the casinos rather than the players - these offshore operators are still considered illegal bookmakers because they are operating in states in which they do not hold a license. For players, this means there is no government oversight and these websites may be at a higher risk of engaging in shady practices, such as refusing to pay out winnings. The safest bet is to steer clear of these operators.

 

Daily fantasy sports and paid fantasy sports leagues both offer prizes for winners in exchange for an entrance fee, so what makes them different from sports betting? The argument over the legality of fantasy sports - and whether or not the states can regulate them - boils down to whether fantasy sports are a form of sports wagering under federal law. This question can be further broken down to whether or not fantasy sports are a game of skill or chance. When viewed as a game of skill, these contests are legal as long as a state has not prohibited them. When viewed as chance, they fall under the same restrictions as gambling.

Few states have passed legislation dealing with the issue of daily and paid fantasy sports. Therefore determining the legality in most states relies on the opinions of attorneys general, court precedent, or statements by other public officials. Currently most big fantasy sports platforms operate in 43 states; the only states that expressly forbid fantasy sports are Arizona, Hawaii, Idaho, Louisiana, Montana, Nevada, and Washington.

 

Regulations around sports betting are dynamic. Contact us to learn more about laws related to online gambling and how LegitScript can help keep you and your merchants in compliance with this and other high-risk industries.

 

David Khalaf is a writing, communications, and marketing professional with specialties in media, investigations, content strategy, and writing instruction. His 20 years of writing, media, and communications work have included two top-tier universities (USC and UCLA), print and digital magazines, consulting firms, and technology companies.

His current work involves content strategy and development at LegitScript, a company that helps the world's leading search engines, payment service providers, and internet platforms and marketplaces do business with legitimate, legally operating entities in more than 80 countries and 15 languages around the world. LegitScript specializes in risk and compliance for highly regulated industries including CBD/cannabis, online gambling, cryptocurrencies, drugs, financial trading, online adult, scams and fraud, and more.

Recent Blog Articles

Levels of risk.

What You Need to Know About the Different Levels of Merchant Risk

Many risk mitigation approaches focus on high-risk merchants, but what about medium-risk merchants? Being aware of the various levels of risk and which category your merchant falls into is a critical step in quantifying risk. Let's delve into what low-, medium-, and high-risk merchants are and the v...
Northern Colorado Hemp Exposition (NOCO)

Navigating Compliance: LegitScript’s Insights from NOCO

Join LegitScript on a journey to the 10th annual Northern Colorado Hemp Exposition (NOCO), where we immersed ourselves in the heart of the CBD industry. LegitScript shared critical compliance knowledge, exchanged insights with industry peers, and absorbed vital regulatory updates from the FDA and US...

What’s Hiding on Your Marketplace? A Look at How Risk Infiltrates Your Platform

You monitor seller listings on your e-commerce marketplace, but do you know what's going on behind the scenes - or, rather, behind the screens? Illegal and brand-damaging activity isn't always easy to spot, and the risk only compounds as your platform scales. In this post, we explore violative activ...
Addiction Treatment Advisory Committee

Harnessing Collaboration: Highlights from LegitScript’s First Advisory Committee Meeting of the Year

Last year, LegitScript set out to relaunch its Addiction Treatment Certification Advisory Committee in order to strengthen avenues of communication and ensure the continued improvement of its Certification solutions. On March 27, 2024, the revitalized committee convened for the first time. Keep read...